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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549
FORM 10-K
ý


☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year endedMarch 31, 20162023
orOr
o
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from                    to                  
Commission File Number: 0-29174
LOGITECH INTERNATIONAL S.A.
(Exact name of registrant as specified in its charter)
Canton of Vaud,
Switzerland
None
(State or other jurisdiction of

incorporation or organization)
None
(I.R.S. Employer

Identification No.)
Logitech International S.A.
Apples,EPFL - Quartier de l'Innovation
Daniel Borel Innovation Center
1015 Lausanne, Switzerland
c/o Logitech Inc.
7700 Gateway Boulevard
Newark , California 94560
(Address of principal executive offices and zip code)
(510) 795-8500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbols(s)Name of each exchange on which registered
Registered Shares par value CHF 0.25 per shareThe NASDAQ Global Select Market; LOGNSIX Swiss Exchange
Registered SharesLOGI Nasdaq Global Select Market
Securities registered or to be registered pursuant to Section 12(g) of the Act:None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý  No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý  No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer"filer," "smaller reporting company," and "smaller reporting"emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerý
ý
Accelerated filero
o
Non-accelerated filero
(Do not check if a
smaller reporting company)
o
Smaller reporting company
o Emerging Growth Companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report.Yes ☒  No o
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Yes ☐  No ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). Yes ☐  No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o☐    No  ý☒
The aggregate market value of the voting shares held by non-affiliates of the registrant, based upon the closing sale price of the shares on September 25, 2015,30, 2022, the last business day of the registrant's second fiscal quarter on the NASDAQNasdaq Global Select Market, was $1,665,196,761.$7,408,622,598. For purposes of this disclosure, voting shares held by persons known to the Registrant to beneficially own more than 5% of the Registrant's shares and shares held by officers and directors of the Registrant have been excluded because such persons may be deemed to be affiliates. In the case of 5% or greater shareholders, we have not deemed such shareholders to be affiliates unless there are facts and circumstances which would indicate that such shareholders exercise any control over the Registrant, or unless they hold 10% or more of the Registrant’s share capital outstanding. This determination is not necessarily a conclusive determination for other purposes.
As of May 6, 2016,3, 2023, there were 161,748,881158,737,710 shares of the Registrant's share capital outstanding.



DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for the 20162023 Annual Meeting of Shareholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended March 31, 2016.











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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9B.
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Item 9C.
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Part III
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Item 11.
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Item 12.
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Part IV
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In this document, unless otherwise indicated, references to the "Company" or "Logitech""Company," "Logitech," "we," "our," and "us" are to Logitech International S.A., and its consolidated subsidiaries and predecessor entities.subsidiaries. Unless otherwise specified, all references to U.S. Dollar, Dollar or $ are to the United States Dollar, the legal currency of the United States of America. All references to CHF are to the Swiss Franc, the legal currency of Switzerland.
Logitech, the Logitech logo, and the Logitech products referred to herein are either the trademarks or the registered trademarks of Logitech. All other trademarks are the property of their respective owners.
The Company's fiscal year ends on March 31. Interim quarters are generally thirteen-week periods, each ending on a Friday of each quarter.Friday. For purposes of presentation, the Company has indicated its quarterly periods endingend on the last day of the calendar quarter.

The term “Sales” means net sales, except as otherwise specified.

All references to our websites are intended to be inactive textual references only, and the content of such websites do not constitute a part of and are not intended to be incorporated by reference into this Annual Report on Form 10-K.

Logitech International S.A. | Fiscal 2023 Form 10-K | 1


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FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on beliefs of our management as of the filing date of this Annual Report on Form 10-K. These forward-looking statements include, among other things, statements related to:
•Our strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of financial performance, and market position;
•Our business strategy and investment priorities in relation to competitive offerings and evolving consumer demand trends affecting our products and markets, current and future worldwide geopolitical, economic and capital market conditions, including fluctuations in currency exchange rates, inflation, and current and future general regional economic conditions for fiscal year 2017 and beyond;downturns;
•Our expectations regarding our restructuring efforts, including the timing thereof;
•Long-term, secular trends that impact our product categories;
•The scope, nature or impact of acquisition, strategic alliance, and divestiture activities;activities
•Our expectations regarding the success of our strategic acquisitions, including integration of acquired operations, products, technology, internal controls, personnel and management teams;
•Our expectations regarding our effective tax rate, future tax benefits, tax settlements, the adequacy of our provisions for uncertain tax positions;
•Our expectations regarding our potential indemnification obligations, and the outcome of pending or future legal proceedings and tax audits;
•Our business anddevelopment, product plans and development and product innovation, and their impact on future operating results and anticipated operating costs for fiscal year 20172024 and beyond;
Market opportunities•Opportunities for growth and our ability to execute on and take advantage of them;them, including our marketing initiatives and strategy and our expectations regarding the success thereof;
Capital investments•Potential tariffs, their effects and research and development;our ability to mitigate their effects;
•Our expectations regarding our share buybackrepurchase and dividend programs;
•The sufficiency of our cash and cash equivalents, cash generated from operations, and available borrowings under our bank lines of credit to fund capital expenditures and working capital needs; and
•The effects of changes in tax, environmental and other laws and regulations in the United States and other countries in which we operate.
Forward-looking statements also include, among others, those statements including the words "anticipate", "believe", "could", "estimate", "expect", "forecast", "intend", "may", "plan", "project", "predict", "should","anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should," "will" and similar language. These statements reflect our views and assumptions as of the date of this Annual Report on Form 10-K. All forward-looking statements involve risks and uncertainties that could cause our actual performance to differ materially from those anticipated in the forward-looking statements depending on a variety of factors. Important information as to these factors can be found in this Annual Report on Form 10-K under the headings of “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Overview”,Operations,” “Overview of our Company,” “Critical Accounting Estimates” and “Liquidity and Capital Resources”,Resources,” among others. Factors that might cause or contribute to such differences include, but are not limited to, those discussed under Item 1A Risk"Risk Factors," as well as elsewhere in this Annual Report on Form 10-K and in our other filings with the U.S. Securities and Exchange Commission, or "SEC." You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.





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PART I
ITEM 1.    BUSINESS
Company Overview
Logitech is a world leader in designing products that have an everyday place in people's lives, connecting them to the digital experiences they care about. Over 30 years ago Logitech started connecting people through computers, and now it’s designing products that bring people together through music, gaming, video and computing. 
Logitech was founded in SwitzerlandFounded in 1981, and headquartered in Lausanne, Switzerland, Logitech International S.A. has been the parent holding company of Logitech since 1988. Logitech International S.A. is a Swiss holdingpublic company with its registered office in Apples, Switzerland, which conducts its business through subsidiaries in Americas (including North and South America), EMEA (Europe, Middle East, Africa) and Asia Pacific (including, among other countries, China, Taiwan, Japan and Australia). Shares of Logitech International S.A. are listed on both the SIX Swiss Exchange under the trading symbol LOGN,(LOGN) and on the Nasdaq Global Select Market under(LOGI). Logitech’s website address is www.logitech.com.
Logitech’s mission is to help all people pursue their passions in a way that is good for people and the trading symbol LOGI. References in this Annual Report on Form 10-K to the "Company," "Logitech," "we," "our,"planet. We design, manufacture and "us" refer to Logitech International S.A. and its consolidated subsidiaries.
Logitech designs, manufactures and marketssell products that allowhelp businesses thrive and bring people to connecttogether when working, creating, gaming and streaming. We sell these products through music, gaming, video, computing,a number of brands: Logitech, Logitech G (including ASTRO Gaming, Streamlabs, and other digital platforms. Blue Microphones) and Ultimate Ears.
Our products participate in five large markets that all have growth potential:diverse portfolio includes:
Music:  This market is comprised of both wired and wireless devices that capitalize on the rapid growth of streaming music. Products in this category include mobile speakers, wearables, and headsets connecting to all music services used on both PCs and mobile devices.
Gaming:  The Gaming market includes products designed for the PCs and consoles as well as gaming devices designed to deliver experiences such as virtual and augmented reality. The rapid rise of eSports, and the promise of new implementations in virtual and augmented reality present growth opportunities in this market. Our products in Gaming include gaming•Creativity & Productivity: personal computer ("PC") mice and presentation tools (reported as Pointing Devices), PC keyboards gaming headsets, gamepads and steering wheels.
Video Collaboration:  Video Collaboration is focused on delivering solutions that enable real-time video, audio and content sharing capability to businesses and individuals. With the rapid adoption of cloud-based solutions that can lower the cost of adoption, our devices and solutions enable the rapid deployment of these cloud-based services through our platform agnostic, and easy to use end points and peripherals.
Home:  The connected home is a market in its early stages of formation and growth. The push to realize the vision of the internet-of-things is delivering more and more connected devices that populate our homes, from the more traditionally connected devices like set-top boxes and digital entertainment devices to things like appliances, lighting, door locks and thermostats. We have a foundation for growth in this market through our entertainment control capabilities in devices suchkeyboard/mouse combination products (reported as our Harmony products.
Creativity and Productivity:This market is defined by products that enhance the users’ experiences associated with computing platforms. With ever increasing connectivity globally and the consistent growth in time spent by people on these computing platforms, we believe there are meaningful growth opportunities for our products. Our continued innovation in navigation, input and content creation on these platforms can drive growth in this market despite the secular decline of new PC sales. Pointing Devices, Keyboards & Combos,Combos), PC-based webcams including streaming cameras (reported as PC Webcams), and tablet keyboards and styluses (reported as Tablet & Other Accessories,Accessories);
•Gaming: gaming mice, keyboards, headsets, steering wheels and other control devices, and Streamlabs services;
•Video Collaboration: conference cameras for meeting rooms, webcams and headsets;
•Music-related products include wireless speakers (reported as Mobile Speakers), and PC Webcams comprisespeakers, headsets, microphones and earphones (reported as Audio & Wearables).
These products are all classified under a single operating segment: Peripherals (see Note 15 to our product categories that address this market.
consolidated financial statements). They also are compatible with many cloud or cloud-based services: video conferencing platforms (e.g. Zoom, Microsoft Teams, Google Meet); esports or video games (e.g. League of Legends, Call of Duty, Valorant); music streaming platforms (e.g. Spotify, Apple Music); content streaming platforms (e.g. Twitch, YouTube); and creativity and productivity platforms (e.g. Google Workplace, Adobe Creative Cloud).
We sell our products to a broad network of domestic and international customers, includingin the Americas, Europe, the Middle East, and Africa ("EMEA") and Asia Pacific. This includes direct sales to retailers, e-tailers, and end consumers through our e-commerce platform, and indirect sales to end customers through distributors. Our worldwide retail network includes consumer electronics distributors, retailers, mass merchandisers, specialty electronics stores, computer
From time to time, we may seek to partner with or acquire, when appropriate, companies that have products, personnel, and telecommunications stores, value-added resellers and online merchants.
In fiscal years prior to fiscal year 2016, we had two segments: Peripherals, including retail and OEM products; and Lifesize Video Conferencing. During fiscal year 2016, we divested the Lifesize Video Conferencing segment, and exited the OEM business. Our financial results treat the Lifesize segment as discontinued operations for all the periods presented in this Annual Report on Form 10-K. As a result, sales of products throughtechnologies that complement our retail channels represented 96%, 94% and 93% of our net sales for the fiscal years 2016, 2015 and 2014, respectively.

Recent Developments
On April 20, 2016, we acquired Jaybird LLC of Salt Lake City, Utah, ("Jaybird") for approximately $50 million in cash, with an additional earn-out of up to $45 million based on achievement of growth targets over two years. Jaybird is a leader in wireless audio wearables for sports and active lifestyles, and the acquisition of Jaybird expands our long-term growth potential in our Music market.

On December 28, 2015, we and Lifesize, Inc., a wholly owned subsidiary of Logitech that held the assets of our Lifesize video conferencing reportable segment ("Lifesize"), entered into a stock purchase agreement with entities associated with three venture capital firms, or the Venture Investors. Immediately following the December 28, 2015 closing of the transaction, the Venture Investors held 62.5% of the outstanding shares of Lifesize, which resulted in a divestiture of the Lifesize video conferencing business by us. The historical results of operations and the financial position of Lifesize are included in the consolidated financial statements of Logitech and are reported as discontinued operations within this Annual Report on Form 10-K.

We exited our OEM business during our fiscal quarter ended December 31, 2015. The results of our OEM business are included in our financial statements as part of continuing operations for the nine months ended December 31, 2015 and prior periods. There is no revenue or cost associated with our OEM business in the three months ended March 31, 2016 and we do not expect any such revenue or cost in future periods.
Industry Overview
Historically, Logitech's business has been driven by the same trends that drove the adoption of desktop and laptop PCs for consumers, businesses and institutional applications, including the growth in affordable processing power, communications bandwidth, the increased accessibility of digital content, and the growing and pervasive use of the Internet for productivity, communication and entertainment. These trends have created opportunities for new applications, new users and dramatically richer interaction between people and digital content.
In the last several years, the PC market has changed dramatically and there continues to be weakness in the global market for new PCs. Traditionally, the trends in the PC market have dictated sales in our PC-related categories however the aging installed base is creating new opportunities for users to refresh their computing experience with new peripherals. The gaming platform continues to show strong growth as online gaming and multi-platform experiences gain greater popularity. Our Video Collaboration business shows growth with the proliferation of meeting rooms yet to be enabled with HD videoconferencing capabilities.
The decline in shipments of new desktop PCs, combined with the increased interest in smaller, touch-interfaced mobile computing devices (such as smartphones and tablets) has rapidly changed the market for PC peripherals. The installed base of PC users is large in our traditional mature markets (the United States, Canada, Western and Nordic Europe, Japan and Australia), but we believe consumer demand for new PCs will continue to decline in future years. We do see nonetheless, some opportunities created by consumer desire to refresh their old PC with new peripherals and in new trends developing within the PC and mobile computing markets.
As the PC market declined, there has been growth in the popularity of smaller, mobile computing devices, such as tablets and smartphones with touch interfaces, which have created new markets and usage models for mobile peripherals and accessories. Logitech offers peripherals and accessories to enhance the use of such digital platforms. For today's consumers, listening to music is a popular entertainment activity, fueled by the growth in smartphones, tablets, music services and internet radio. Consumers are optimizing their audio experiences on their tablets and smartphones with wireless mobile speakers that pair easily with their mobile devices and with in-ear and other headphones. Our mobile speakers and in-ear headphone products target a large and growing market that reflects the increasing popularity of mobile devices for accessing digital music. Additionally, within the music market, consumers are increasingly listening to wireless earphones while they undertake other activities such as athletics. Consumers are also enhancing their tablet experience with a range of keyboards and cases that enable them to create, consume and do more with their tablets conveniently and comfortably.
The use of video across multiple platforms—PCs, laptops and mobile devices such as tablets and smartphones—is a continuing trend. The video communication industry continues to make progress towards a vision in which people can conduct a video call from any of these platforms to any other platform. The market opportunity to provide innovative, affordable, and easy to use video collaboration products to the millions of small to medium sized meeting rooms lacking video is substantial, and we are well-positioned to take advantage of it.

The trend among businesses and institutions to embrace cloud video conferencing is driving our Video Collaboration category, and offers a long-term growth opportunity for Logitech. For businesses and institutions, video conferencing is increasingly substituted for travel, because of high travel costs as well as the productivity gain that can be achieved by a high-quality face-to-face meeting that does not require travel away from the office. Further, with the increased availability of higher Internet bandwidth, video conferencing is becoming a key component of Unified Communications, which is the integration of communications solutions such as voicemail, e-mail, chat, presentation sharing and live video meetings.
The home is also an important place for technological development, particularly as increasing amounts of objects become connected smart home devices such as light bulbs, security locks, thermostats etc. Logitech’s line of universal remote controls control electronic devices around the home as well as these other smart devices.
Finally, we believe that trends established in consumer technology, such as brand identity, affordability, ease of installation and use, customer support, and design, have become important aspects of the purchase decision when buying a consumer electronics product. These are strengths that we believe Logitech offers in both consumer and enterprise markets.
Business Strategy
Logitech's foundation for future growth is built on:
•Powerful design - design experiences that transcend their functional value and are loved by people;
•Revitalized product creation for existing and new categories;
•Augment a winning, talented and passionate global team;
•Outstanding execution and operational excellence; and
•Delivering operating leverage to improve profitability and to create the capacity to invest in growth.
We are focusing our investments in product categories with growth opportunities in which we can leverage our areas of expertise, competitive advantages and technology.
Our product development process and responsiveness to consumers have become faster. We laid the foundation in fiscal year 2014 for building a design company that leverages technology, innovation and consumer insights. We are continuing to build on this foundation by making design a more integral part of our product development with the goals of creating fewer but more impactful products while increasing consumer satisfaction.
strategic direction. We continually review our product offerings and our strategic direction in light of our profitability targets, competitive conditions, changing consumer trends and the evolving nature of the interface between the consumer and the digital world.
Business Strategy
Logitech's foundation for future growth is built on five core capabilities that apply to all of our product categories:
•Design;
•Engineering;
•Go-to-market;
•Marketing; and
•Operations.
Design
Over the past decade, Logitech has reinvented itself as a design company, whereby design-led engineering is used as a strategic differentiator. Our key design centers are in Switzerland, Ireland, the United States, and Taiwan, where we have an internal team of designers who work in close collaboration with our engineering and manufacturing teams at the beginning of our innovation process. This capability has driven the transformation of our portfolio over the years. In addition, design significantly impacts Logitech’s efforts to improve outcomes for all people and the planet through a program we call Design for Sustainability. All of this work has been recognized through various awards: in fiscal year 2023, we were honored with 116 design awards.
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Engineering
Our decades-long expertise in key engineering disciplines such as sensors, acoustics, optics, wireless, and power management is a core competitive advantage of Logitech. Furthermore, we continue to extend our engineering capabilities into more advanced technologies such as software, apps, cloud, data analytics, machine learning, artificial intelligence ("AI") and some core building blocks of navigation and tracking in augmented reality ("AR") or virtual reality ("VR"). Our engineering team has expertise in bringing together these many technologies, across hardware and software to develop an innovative portfolio. These engineering capabilities combined with our award-winning design team form the basis of Logitech's key innovation engine.
Go-To-Market
Logitech has an extensive global go-to-market network that is leveraged to introduce new products, enter new market categories and optimize the value of our existing products and product categories. We have multiple opportunities to drive growth through existing products in existing and new retailers and e-tailers as well as through new products in existing and new retailers and e-tailers. Beyond e-tailers, retail and distribution channels, we have strengthened other commercial channels in areas such as computer and telecommunications stores, value-added resellers and online merchants. As we have increased our investments in the business-to-business ("B2B") channel, we have expanded our enterprise sales coverage through our sales force as well as various channel partners. Expansions into new channels also bring numerous cross-selling opportunities across our broad product portfolio.
Marketing
Across Logitech’s multiple categories, we focus on enhancing our marketing capabilities around brand strategy and execution, digital marketing, and marketing technology. With our products and design as a foundation, our marketing demonstrates the relevancy of our products in the lives of our customers, focusing on specific and diverse audiences. We continue to evaluateincrease our presence when and phase outwhere our products as partand messages are most relevant, which enables us to drive brand value.
Operations
Logitech’s operations capability consists of a hybrid model of in-house manufacturing (including a wholly-owned facility in Suzhou, China) and third-party contract manufacturers (principally in Asia), which allows us to effectively respond to rapidly changing demand, leverage economies of scale, protect intellectual property, and offer high quality production in even the most sophisticated of products. Our supply chain’s extensive global reach, key distribution channels, adoption of factory automation and strategic business relationships combined with extensive analytic modeling expertise, optimization tools and global processes provide a competitive advantage against many of our ongoing effortscompetitors.
Environmental Sustainability
In recent years, we have accelerated our climate strategy, focused on eliminating our carbon footprint through Reduce, Renew, Restore, and Rethink programs. Reduce focuses on our life-cycle carbon footprint using Design for Sustainability ("DfS") principles across our value chain. Renew motivates us to strengthen our overall portfolio.
Our turnaround strategy, which we originally outlineddrive ambitious uptake of renewable electricity and transition away from fossil fuels. In order to support and restore climate-impacted communities and ecosystems, the Restore lever supports annual investment in May 2013, has been a success to datecarbon offsets and we continue to transform Logitech into a simpler, faster, growing company.removals. We are focused on designalso Rethinking how we do business, innovating our materials, supply chains, and innovation driving a diverse portfolio of brandsgo-to-market opportunities.
Products
Logitech designs, manufactures and product categoriesmarkets products that will deliver both growthhelp businesses thrive and profitability. In addition to exiting our OEM businessbring people together when working, creating, gaming and divesting our Lifesize video conferencing business, we continue to streamline our overall cost structure through product, overhead and infrastructure cost reductions. The savings from all these actions will be used to offset currency headwinds and invest in future growth.
Product Strategy
To take advantage of the opportunities we anticipate in the growing digital marketplace, Logitech's product strategy focuses on enabling and enhancing the multiple interfacesstreaming, for input, navigation, audio and video across the many digital devices useduse by today's consumers and enterprises in our five large market opportunities.enterprise customers.
Music
Creativity & Productivity
Pointing Devices: Logitech has a solid foundation of audio solutions designed to satisfy consumers' needs for music consumption sourced fromoffers a variety of platforms. pointing devices. Some of our key products in this category include:
•The Logitech MX Master 3 and MX Anywhere 3 wireless mice, our flagship wireless mouse products. Enabled with Logitech Flow cross-computer control software and Logi Bolt cross-operating system connectivity, these products represent the new paradigm for precise, fast, comfortable cross-computer digital navigation and digital creativity.
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•The Logitech Wireless Mouse M650, which offers a new precise scrolling wheel, an 18-month battery life, Logi Bolt connectivity compatible with any operating system, side-buttons and comfortable design, and is available in Large, Medium and left-handed versions with sustainable materials.
•The Logitech Wireless Mouse M185, a wireless mouse with nano receiver technology that is compatible with any computer.
•The Logitech Pebble Mouse, a wireless mobility mouse with dual connectivity (BT and unifying nano technology) that is compatible with any computer.
•Two recently introduced mice, Logitech Lift vertical mouse with Logi Bolt wireless technology and the new smart wheel available in right and left-handed version, and Pop Mouse for younger generations that offers more style at the desk.
Keyboards & Combos: Logitech offers a variety of corded and cordless keyboards, living room keyboards, and combos (keyboard-and-mouse combinations). Some of our key products in this category include:
•The Logitech Wireless Combo MK270, a full-size keyboard and mouse combination with a tiny USB receiver.
•The Logitech MX Keys Wireless keyboard, a premium backlit keyboard with customizable keys to directly access menus and shortcuts within leading creativity and productivity apps. We recently added the MX Keys mini wireless keyboard ideal for smaller spaces and creators and Logitech MX mechanical wireless keyboard.
•The Logitech K380 wireless minimalist keyboard with multi-switch functionality to easily navigate from one screen to another (from PC to Phone to tablets) that is compatible with any computer.
PC Webcams: Our musicPC Webcams category comprises webcams targeted primarily at video conferencing users purchasing for individual use. A key market driver includes people upgrading their work-from-home video conferencing setup. The Logitech HD Pro Webcam C920 and C922 are key products in this category and we recently added Logitech Brio 300 and Brio 500 to the portfolio.
Tablet & Other Accessories: Our Tablet & Other Accessories category includes keyboards for tablets and smartphones as well as other accessories for mobile devices. These products are mostly for iPads but are also for select Samsung and other Android tablets. Some of our key products in this category include:
•The Combo Touch for the iPad 9th Generation, iPad Air, iPad Pro 11 and iPad Pro 12.9, is our newest design offering a Smart Connected backlit full-size keyboard, any-angle kickstand for flexible viewing angles and a trackpad for gestures, clicks and navigation.
•The Rugged Folio Keyboard for the iPad 9th Generation, bringing a more protective rugged folio, with a wipeable fabric keyboard, a rugged and protective holder and an any-angle kickstand to allow multiple viewing angles. The Rugged Folio uses Smart Connector technology to connect to the iPad seamlessly, with no need for batteries or Bluetooth pairing.
•The Logitech Slim Folio Keyboard for the iPad Pro 11 and 12.9, bringing a Bluetooth backlit keyboard with a folio design for optimal working and viewing angle, light front and back protection and an Apple Pencil holder. The Logitech Slim Folio Keyboard for the 9th generation iPad for a light protection folio with a Bluetooth keyboard.
•The Rugged Combo Keyboard and Rugged Combo Touch, Made for Education are designed to provide the best keyboard and touchpad experience for the iPad Entry 9th generation in classrooms or at home, featuring drop protection, secure sealed keyboard and any angle viewing.
Gaming
Logitech G provides products for both gamers and creators, including mice, keyboards, headsets, and steering wheels, in addition to streaming software through Streamlabs. Incorporating innovative design and advanced technologies, some of the key products and solutions are focused primarily on Mobile Speakers, includingin this category include:
•The Logitech G PRO X Superlight Wireless Gaming Mouse that was designed in collaboration with the world's top esports professionals, featuring our UE BOOM family of mobileLIGHTSPEEDTM professional grade wireless speakers,technology, and weighing in at less than 63 grams.
•The Logitech Pro Racing Wheel that features our Jaybird wireless audio wearables for sports and active lifestyles,exclusive TRUEFORCE feedback system that connects directly to in-game physics, and our custom in-ear headphones. We enhance ournew Direct Drive motor.
•The ASTRO A30 Wireless Headset that is compatible with PC, Xbox Series X|S, PlayStation5, Nintendo Switch, and mobile, speakers with related applications thatportable gaming devices.

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•Streamlabs software which provides streaming and monetization tools for content creators to control the speakers throughmanage their mobile devices, including features such as Double Upaudience and Block Party to combine two or more speakers with double or stereo sound.broadcast.
Gaming
Our Gaming strategy is to leverage our deep research and development (R&D) expertise in the areas of PC peripherals and gaming devices to build the most advanced gaming gear on the market. We develop our software development kits, intelligent illumination, G-Key Macros and Arx Control application to better integrate our products with games and provide gamers with differentiated experiences that enhance gameplay. In addition, we sponsor and work closely with eSports athletes to enhance our brand and the quality and functionality of our gaming products.
Video Collaboration
The market opportunityVideo Collaboration category includes Logitech’s conference room cameras, which combine enterprise-quality audio and high definition ("HD") 4K video with affordability to provide innovative, affordable,bring video conferencing to businesses of any size, as well as state of the art webcams and easy to use videoheadsets that turn any desktop into an instant collaboration space. Our key products to the millions of meeting rooms lacking video (especially so-called huddle rooms), is substantial, and we are well positioned to take advantage of it. Over the past year, we have built momentum with our award winning ConferenceCam family that providesin this category include:
•Logitech Rally Bar, an all-in-one video andbar purpose-built for midsize rooms, featuring brilliant video, room-filling audio, conferencing solutions, including Logitech GROUP, CONNECT, and the CC3000e.flexibility to deploy in PC or appliance mode.
Home•Logitech Rally which offers best-in-class video conferencing with Ultra HD 4K video and professional audio that easily turns medium- to large-sized conference rooms into video-enabled collaboration rooms.
Logitech's Harmony brand•Logitech MeetUp which is well recognizedLogitech’s premier ConferenceCam designed for huddle rooms, with a room-capturing 120° field of view ("FOV"), 4K optics and exceptional audio performance.
•Logitech Tap touch-screen controller which connects to any computer through USB and serves as an ideal controller for video conferencing room solutions from Google®, Microsoft®, and Zoom.
•Logitech BRIO which has 4K video, RightLight 3 and high dynamic range ("HDR") to improve challenging lighting, and Windows Hello facial recognition support for secure login using just a user's face.
Music
Mobile Speakers: Our Mobile Speakers category is a portfolio of portable wireless Bluetooth speakers for music on the leadergo. The top revenue-generating product in programmable, performance remote controls for home entertainment, leveraging our proprietary database. We built on this expertise in remote controlsMobile Speakers category during fiscal year 2023 was Ultimate Ears BOOM 3 ("BOOM3"), our ruggedized portable Bluetooth wireless speaker. During fiscal year 2023, our collection of portable Bluetooth speakers included WONDERBOOM3, BOOM3, MEGABOOM3, and our Harmony brandlargest most powerful speaker HYPERBOOM that delivers the loudest and most rich audio performance in the portfolio.
Audio & Wearables: Our Audio & Wearables category comprises PC speakers, PC headsets, in-ear headphones, premium wireless audio wearables designed to develop devices to controlenhance the digital home, and Harmony products are now being used by many consumers to control a broad range of their connected home devices. We believe this provides a strong foundation to expand beyond the remote control category and create entirely new product categories dedicated to the smart home.
Creativity and Productivity
PC/Mac Accessories
Logitech continues to provide new, innovative, high-performance PC and Mac computer navigation devices and audio and video products for the large installed base of PC and Mac computers for the consumer and enterprise markets.
Tablet & Other Accessories
We are focusing on innovating new features and products to provide excellent consumer experience, and on reducing product cycle time to address the evolving market demandstudio-quality Blue Microphones for professionals and frequent introductions of new devices. We have developed a range of products for the tablet market, for both Appleconsumers, such as Yeti, Yeti Nano and Android platforms. We believe there will be additional opportunities for complementary peripherals to enhance consumers' experiences with tabletsYeti X.
Research and other mobile devices.Development
Design and Technological Innovation
Logitech seeks to fulfill the increasing demand for interfaces between people and the expanding digital world across multiple platforms and user environments. The interface evolves as platforms, user models and our target markets evolve. As access to digital information has expanded, we have extended our focus beyond the PC to other entry and control points to the internet and digital world, including mobile devices and the meeting room. All of these platforms require interfaces that are customized according to how the devices are used. We believe this expansion of access points provides additional attractive opportunities for Logitech because the relevance and importance of navigation, interaction, video and audio interfaces and applications remain substantially the same across platforms.
We recognize that continued investment in product research and development is critical to facilitate innovation of new and improved products, technologies and technologies. These products have been earning prestigious design awards and enthusiastic reviews in the media - more than 70 design awards over the past three years. This is an important indication that Logitech’s strategic aim to become a design company is working. During the fourth quarter of fiscal year 2016 alone, we won five GOOD DESIGN awards, eight iF Design awards and a record for us, nine Red Dot awards.experiences. Our research and development expenses for fiscal years 2016, 20152023, 2022 and 20142021 were $113.6$280.8 million $108.3

, $291.8 million and $112.4$226.0 million, respectively. We expect to continue to devote significant resources to research and development, including devices for digital platforms, video communications, wireless technologies, power management, and user interfaces and device database management to sustain our competitive position.
Logitech is committed to meeting consumer needs for peripheral devices and other kinds of accessories, and believes that design, innovation, value and product quality are important elements in gaining market acceptance and strengthening our market position.
Products
Logitech designs, manufactures and markets products that allow people to connect through music, gaming, video, computing, and other digital platforms. The large majority of our revenues have historically been derived from sales of our products for use by consumers.
Our brand, portfolio management, product definition and engineering teams are responsible for product strategy, technological innovation and development, and for bringing our products to market. Our marketing team is responsible for supporting the Logitech brand, social media, and digital marketing. Our design team provides creative leadership, consumer insights, design direction and management from concept exploration to product and experience execution.
Music
Mobile Speakers: Our Mobile Speakers category comprises of portable wireless Bluetooth speakers. Our top revenue-generating product during fiscal year 2016 was UE BOOM 2, the 360° portable bluetooth wireless speaker that provides bold, immersive sound in every direction. The UE BOOM 2 was a key driver for success in this product category along with the UE MEGABOOM, a 360° portable, waterproof, bluetooth wireless speaker with more bass that is a larger and more powerful complement to UE BOOM 2 and was one of our best selling products in fiscal year 2016. We also offer the UE Roll, the UE Mini Boom and UE Pro.
Audio-PC & Wearables: category comprises PC speakers, PC headsets, in-ear headphones and premium wireless audio wearables designed to enhance the audio experience. We offer both the Jaybird wireless audio wearable for sports and active lifestyles and our custom in-ear headphones.
Gaming
Logitech offers a full range of dedicated gaming gear for gamers, including mice, keyboards, headsets, gamepads and steering wheels. Some of our products in this category include:
The Logitech G810 Orion Spectrum Mechanical Gaming Keyboard, features Romer-G switches, intelligent RGB illumination, and a wide range of options to customize colors and profiles.
The Logitech G933 Wireless Gaming Headset, offers high-performance 7.1 channel Dolby and DTS surround sound, a lag-free 2.4 GHz wireless connection, and three customizable G keys for one-touch command over music, chat, lighting and other features.
The Logitech G900 Chaos Spectrum Gaming Mouse, features professional grade wireless technology, an advanced optical gaming sensor, a flexible ambidextrous design, and customizable lighting, for maximum performance and comfort over long gameplay sessions.
The Logitech G920 Driving Force Steering Wheel, features a powerful dual-motor force feedback transmission, hand-stitched leather-wrapped rim, and stainless steel throttle, brake and clutch pedals for an ultra-realistic driving experience.
Video Collaboration
The Video Collaboration category includes Logitech’s ConferenceCams, which combine enterprise-quality audio and HD 1080p video with affordability to bring video conferencing to business of any size. Our key products in this category include:
The recently launched Logitech ConferenceCam Group offers best-in-class videoconferencing with HD 1080p video and professional audio that easily turns medium to large sized conference rooms into video-enabled collaboration rooms.
The Logitech ConferenceCam Connect is a portable, all-in-one video conference solution with HD 1080p video, and professional audio designed for huddle rooms.

Home
Our Smart Home category includes our Harmony line of advanced home entertainment controllers and new products dedicated to controlling emerging categories of connected smart home devices such as lighting, thermostats, door locks, etc. Examples include:
The Logitech Harmony Elite and the Logitech Harmony Companion, both of which feature Logitech's Harmony Hub and Harmony Smartphone App to complete control of the home entertainment system including Bluetooth and IP devices such as PS4 and Roku as well as connected home devices such as Philips Hue lights and Nest thermostats.
The Logitech Harmony 350, 650 and 950 remotes, offer infrared (IR) only control of home entertainment devices.
Creativity and Productivity
Pointing devices: Logitech offers a variety of pointing devices, sold through retail channels. Some of our key products in this category include:
The Logitech MX Master Wireless mouse is our flagship wireless mouse that is the new paradigm for precise, fast, comfortable computer navigation.
The Logitech Wireless Mouse M325 offers micro-precise scrolling with a feel-good, contoured design.
The Logitech Wireless Mouse M185 is a wireless mouse with nano receiver technology that is compatible with any computer.
Keyboards & Combos: Logitech offers a variety of corded and cordless keyboards, living room keyboards, and combos (keyboard-and-mouse combinations). Some of our products in this category include:
The Logitech Wireless Touch Keyboard K400 Plus is a compact keyboard with an integrated touchpad and 10-meter wireless range, designed for use in the living room.
The Logitech Combo MK270 offers a wireless compact mouse and keyboard with nano technology.
The Logitech Combo MK520 is a sleek full size keyboard and mouse combination with unifying receiver.
Tablet & Other Accessories: Our Tablet & Other Accessories category includes keyboards and covers for tablets and smartphones as well as other accessories for mobile devices, mostly iPads but also for select Samsung tablets. We expect to continue to enhance this category through the introduction of additional innovative and complementary products. Some of our products in this category include:
The Logitech CREATE Backlit Keyboard Case with Smart Connector for iPad Pro 12.9-inch provides thin and light front and back protection, full size 19 mm keys, and adjustable backlighting.
The Logitech Type-S, a keyboard case for the Samsung Galaxy Tab A 9.7, Samsung Galaxy Tab.
The Logitech Keys-To-Go, an ultra-portable, stand-alone keyboard.
PC Webcams: Our PC Webcams category comprises of PC-based webcams targeted primarily at consumers. Our top revenue-generating webcams during fiscal year 2016 was the Logitech HD Pro Webcam C920, which offers razor-sharp HD 1080p video recordings and stereo sound.
Competitive Strengths
We believe the key competitive strengths that enable Logitech to achieve success are:
Our innovation capability, including understanding of product development, technology and industrial design excellence as an emerging strength, eight of our products have been selected as 2016 iF DESIGN AWARD Winners, in addition to our patent portfolio of over 670 patents.
Our expertise in key engineering disciplines that underlie our products, and our continued enhancement of our products through the use of advanced technologies.
Our designs have an everyday place in people's lives, connecting them to the digital experiences they care about.
The Logitech and Ultimate Ears (UE) brand names are recognized worldwide as symbols of product quality, innovation, ease of use and price-performance value. Our recently acquired Jaybird brand is a leader in wireless audio wearables for sports and active lifestyles.
Our hybrid model of in-house manufacturing and third-party contract manufacturers, which allows us to effectively respond to rapidly changing demand and leverage economies of scale.

Our supply chain's extensive global reach, key distribution and strategic business relationships combined with extensive analytic modeling expertise, optimization tools and global processes.
Our global presence, capable of drawing on the strengths of our global resources, global distribution system and geographic revenue mix.
Our expertise in developing products for broad array of platforms gear such as PC, Mac, and Apple and Android mobile devices.
Our extensive retail and e-tail presence across consumer electronics, mass merchandisers and office infrastructures.
We believe that we have competed successfully based on these factors. We believe that Logitech's future lies with our ability to continue to capitalize on these strengths.
Marketing and Design
Logitech's Design and Marketing team strives to understand consumers so that we can innovate, create and deliver amazing design to our users at each and every touch point of the consumer experience with the Logitech and UE brands and products.
We believe that by creating products that people desire and love, we maximize the number of consumers who actively buy and recommend Logitech products, fueling brand preference within and across our many product categories.
We are making good progress building a strong internal Design and Marketing team, while partnering with world renowned design agencies to further our “design-led” approach to product development and launch. Our key design centers are in Switzerland, Ireland, the United States, and Taiwan.
Sales and Distribution
Principal Markets
Net sales to unaffiliated customersSales by geographic region (based on customers' location) for fiscal years 2016, 20152023, 2022 and 2014 (based on the customers' location)2021 are as follows (in thousands):
 Year Ended March 31,
 202320222021
Americas$1,930,908 $2,317,941 $2,206,552 
EMEA1,299,657 1,724,027 1,735,682 
Asia Pacific1,308,253 1,439,133 1,310,045 
Total Sales$4,538,818 $5,481,101 $5,252,279 
  Year Ended March 31,
  2016 2015 2014
Americas $881,379
 $864,761
 $799,431
EMEA 645,694
 670,890
 724,671
Asia Pacific 491,027
 469,257
 483,926
  $2,018,100
 $2,004,908
 $2,008,028
Revenues from sales to customers in Switzerland, our homecountry of domicile, represented 2% 3% of our total consolidated net sales infor each of fiscal years 2016, 20152023, 2022 and 2014.2021. In fiscal years 2016, 20152023, 2022 and 2014,2021, revenues from sales to customers in the United States represented 38% 35%, 36% 34% and 34%35% of our total consolidated net sales, respectively. In fiscal years 2023, 2022 and 2021, revenues from sales to customers in Germany represented 14%, 15% and 16% of our sales, respectively. Revenues
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from sales to customers in China represented 11% and 10% of our sales for fiscal year 2023 and 2022, respectively. No other single country represented more than 10% of our total consolidated net sales for fiscal years 2016, 20152023, 2022 or 2014.2021.
Sales and Distribution
Our sales and marketing activities are organized into three geographic regions: the Americas (North and South America), EMEA (Europe, Middle East, Africa) and Asia Pacific (China, Japan, Australia, Taiwan, India and other countries).
We primarily sell our products primarily to a network of distributors, retailers and retailers.e-tailers. We support these channels with our direct sales force and third-party distribution centers located in North America, South America, Europe and Asia Pacific. Some of these distribution centers perform product localization with local language manuals, packaging and power plugs.
Logitech directly sells products to distributors and large retailers. Distributors in North America include Ingram Micro, Tech Data Corporation, D&H Distributing, and Synnex Corporation. In Europe, pan-European distributors include Ingram Micro, Tech Data, and Gem Distribution. We also sell to many regional distributors such as Actebis GmbH in Germany and Copaco Dc B.V. in the Netherlands. In Asia, major distributors include Beijing Digital China Limited in China, Daiwabo in Japan, and the pan-Asian distributor, Ingram Micro. Our distributor customers typically resell products to retailers, value-added resellers, systems integrators and other distributors with whom Logitech does not have a direct relationship.

In fiscal years 2016, 2015 and 2014, Ingram Micro Inc. and its affiliated entities together accounted 14%, 15% and 15% of our net sales, respectively. In fiscal year 2016 Amazon Inc. and its affiliated entities together accounted for 10% of our net sales. No other customer individually accounted for more than 10% of our net sales during fiscal years 2016, 2015 or 2014. The material terms of our distribution agreements with Ingram Micro and its affiliated entities are summarized as follows:
The agreements are non-exclusive in the particular territory and contain no minimum purchase requirements.
Each agreement may be terminated for convenience at any time by either party. Most agreements provide for termination on 30 days written notice from either party, with two Ingram Micro agreements providing for termination on 90 days notice.
We generally offer an allowance for marketing activities equal to a negotiated percentage of sales and volume rebates related to purchase volumes or sales of specific products to specified retailers. These terms vary by agreement.
Most agreements allow price protection credits to be issued for on-hand or in-transit new inventory if we, in our sole discretion, lower the price of the product.
We grant limited stock rotation return rights, which vary by agreement.
The material terms of our distribution agreements with Amazon and its affiliated entities are summarized as follows:
Each agreement has a one year term followed by one year automatic renewals.
We generally offer an allowance for marketing activities equal to a negotiated percentage of sales through transactions and additional rebates related to sales of specific products to end users. These terms vary by agreement.
Most agreements allow price protection credits to be issued for on-hand or in-transit new inventory if we, in our sole discretion, lower the price of the product.
We grant limited stock rotation return rights, which vary by agreement.
Logitech's products can be purchased in mosta number of major retail chains, where we typically have access to significant shelf space. These chains in the U.S. include Best Buy, Wal-Mart, Staples, Office Depot and Target. In Europe, chains include Metro Group (Media-Saturn Group), Carrefour Group, Kesa Electricals, Fnac, and Dixons Stores Group PLC.addition, Logitech products can also be purchased online either directly or indirectly from Logitech.com or through e-tailers, such as Amazon.com, the websites of our major retail chains, noted previously, and others. Logitech products are also carried by business-to-business direct market resellers such as CDW, Insight, Zones, PC Connection,resellers.
In fiscal years 2023, 2022 and SHI.
Through our operating subsidiaries, we maintain sales offices or sales representatives in approximately 43 countries.
Backlog
We typically have a relatively small amount of orders at the end2021, Amazon Inc. and its affiliated entities together accounted for 19%, 17% and 13% of our gross sales, respectively. In fiscal periods that we have received but have not shipped, which is referred to as backlog. In our experience, the amount of backlog at any particular fiscal period-end is not a meaningful indicationyears 2023, 2022 and 2021, Ingram Micro Inc. and its affiliated entities together accounted for 13%, 15% and 14% of our future business prospects.gross sales, respectively. TD Synnex and its affiliate entities together accounted for 15% and 14% of our gross sales for fiscal year 2023 and 2022, respectively. No other customer individually accounted for more than 10% of our gross sales during fiscal years 2023, 2022 or 2021.
Customer Service and Technical Support
Our customer service organization provides user technical support, support related to product inquiry, and order support. We support these customer service functions with an outsourced operation that hasoperations as well as inhouse support centersteams located in countries across the world. Outsourced locations include the Philippines, the United Kingdom, Japan, Bulgaria and China, and inhouse support is primarily located in the Philippines, Mexico,United States and Northern Ireland.
Logitech maintainsIndia with several other locations in each region. Our customer service and technical support capabilitiespersonnel in the United States, Canada, Europe, and the Asia Pacific region. Customer service and technical personneleach of our regions provide support services to retail purchasers of products through telephone, e-mail, forums, chat, facsimile and the Logitech Web site. Logitech provides warranties onSupport website. For some of our branded products that range from onebrands, dedicated support websites and dedicated internal support teams are available. To improve our customers' experience and operate efficiently, we use technology to three years.
Infacilitate chatbot interactions, enable self-help and apply Artificial Intelligence to optimize support searches. We also have multiple walk-in centers in Korea India and China, there are multiple locationsmanaged by third-party providers, where consumers may obtain service for their Logitech products. These locations are managed by a third party logistics provider. Consumers who have purchased Logitech products can visit these locations for product inspection, testing and return or exchange of products. Within China, there is
Logitech provides warranties on our branded products that range from one to five years. For our Video Collaboration category, we also a mail-in centerwork with channel partners to provide theseoffer bundled support services for more remote locations in China.with Logitech Video Collaboration solutions.

Manufacturing
Logitech's manufacturing operations consist principally of final assembly and testing. Since 1994, we have had our own manufacturing operations in Suzhou, China, which currently handles approximately half40% of our total production of products. We continue to focus on ensuring the efficiency of the Suzhou facilities, through the implementation of quality management, automation, process improvements, and employee involvement programs. We outsource the remaining production to contract manufacturers and original design manufacturers located principally in Asia. Both our in-house and outsourced manufacturing operations are managed by our worldwide operations group. The worldwide operations group also supports the business units and marketing and sales organizations through the management of distribution centers and the supply chain and the provision of technical support, and other services.logistics networks.
New product launches, process engineering, commodities management, logistics, quality assurance, operations management and management of Logitech's contract manufacturers occur in Hsinchu,China, Taiwan, Malaysia, Suzhou, China, Shenzhen, China and Hong Kong, China.Malaysia, Thailand, Mexico, and Vietnam. Certain components are manufactured to Logitech's specifications by vendors in Asia, the United States, and Europe. We also use contract manufacturers to supplement internal capacity and to reduce volatility in production volumes. In addition, some products, including most keyboards, certain gaming
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devices, certain video conferencing devices, and certain audio products are manufactured by third-party supplierscontract manufacturers to Logitech's specifications. Retail product localization with local language manuals, packaging, and power plugs may be performed at distribution centers in North America, Europe and Asia Pacific.
Our hybrid model of in-house manufacturing and third-party contract manufacturers allows us to effectively respond to rapidly changing demand and leverage economies of scale. Through our high-volume manufacturing operations located in Suzhou, China, we believe we have been able to maintain strong quality process controls and have realized significant cost efficiencies. Our Suzhou operation provides for increased production capacity, manufacturing know-how, IP protection and greater flexibility in responding to product demand. Further, by outsourcing the manufacturing of certain products, we seek to reduce volatility in production volumes as well as improve time to market.
Competition
Our product categories are characterized by large, well-financed competitors, short product life cycles, continual performance enhancements, and rapid adoption of technological and product advancements by competitors in our retail markets. We have experienced aggressive price competition and other promotional activities from our primary competitors and from less-established brands, including brands owned by some retail customers known as house brands. We may also encounter more competition if any of our competitors in one or more categories decide to enter other categories in which we currently operate.
As we target opportunities in new categories and markets and as some of our product categories demonstrate growth, we are confronting new competitors, many of which may have more experience in the categories or markets and have greater marketing resources and brand name recognition than we have. In addition, because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater competition in the future from well-established consumer electronics companies in our developing categories, as well as future ones we might enter. Many of these companies have greater financial, technical, sales, marketing, and other resources than we have.
We expect continued competitive pressure in our business, including in the terms and conditions that our competitors offer customers, which may be more favorable than our terms and conditions and may require us to take actions to increase our customer incentive programs, which could impact our revenuessales and operating margins.
Music 
Mobile Speakers: Our competitors for Bluetooth wireless speakers include Bose, JBL, Harman Kardon, and Beats. Bose is our largest competitor. Apple's ownership of Beats may impact our access to shelf space in Apple retail stores and adversely impact our ability to succeed in this important growth market. Personal assistance and other devices that offer music, such as Amazon's Echo, may also compete with our products. Amazon is also a significant distributor for our products.
Audio-PC & Wearables: In the PC speakers business, our competitors include Bose, Cyber Acoustics, Phillips and Creative Labs, Inc. In the PC headset business, our main competitors include Plantronics and Altec Lansing. In-ear headphones competitors include Skull Candy, Sennheiser, Sony, Beats, and others.
Gaming  
Competitors for our Gaming products include Razer USA Ltd., SteelSeries, and Turtle Beach.

Video Collaboration    
Our competitors for Video Collaboration products include Cisco Systems, Inc., Polycom, Inc., and Avaya, Inc.
Home  
Direct competitors in the remote control market include pro-installer-focused Universal Remote Control Inc., and new “DIY” entrants from Savant Systems and Ray Enterprises. Indirect competition exists in the form of low-end “replacement remotes” such as Sony, RCA, GE, pure app-based solutions such as Peel, as well as device and/or subscriber-specific solutions from TV makers such as Samsung and Vizio and multiple-system operator (MSOs) such as Comcast and DirecTV.
Competition in the home control market exists in form of home automation platforms such as Smart Things (owned by Samsung), Amazon with their Echo product, Nest (owned by Google), Wink and many other startups in the space. Many of these products and brands are partners with Logitech as well via integrations with Harmony remotes.
Creativity and Productivity
Pointing Devices: Apple Inc. ("Apple"), Microsoft Corporation ("Microsoft"), Lenovo Group Ltd (“Lenovo”), Dell Technologies Inc. ("Dell"), and Hewlett PackardHP Inc. are our main competitors.competitors worldwide. We also experience competition and pricing pressure from less-established brands, including house brands which we believe have impacted our market shareand local competitors in some sales geographies.Asian markets, such as Elecom Co., Ltd., Buffalo Inc., Shenzhen Rapoo Technology Co., Ltd. (“Shenzhen Rapoo”), and Xiaomi Corporation.
Keyboards & Combos: Microsoft Corporation, Hewlett Packard and Apple Inc. are ourthe main competitors in our PC micekeyboard and keyboardcombo product lines. We also experience competition and pricing pressure for corded and cordless micekeyboards and combos from less-established brands, including house brands.brands and local competitors in Asian markets, such as Shenzhen Rapoo, IKBC, and Xiaomi Corporation.
PC Webcams: Our primary competitors for PC webcams are Microsoft, Cisco and other manufacturers taking smaller market share such as Razer Inc ("Razer") and HIKVision.
Tablet & Other Accessories: Competitors in the tablet case market include Apple, Otter, Speck and a large number of small brands. Competitors in the tablet keyboard market are Apple, Zagg Inc., Kensington Computer Products Group, Belkin International, Inc., Targus Corporation and other less-established brands. Although we are one of the leaders in the tablet keyboard market and continue to bring innovative offerings to the market, we expect the competition may increase. Competitors in the tablet case market include Apple, Otter Products LLC, Speck Products and a large number of smaller brands.
PC Webcams:
Gaming  
Competitors for our gaming products include Razer, Corsair Gaming, Inc., SteelSeries (owned by GN), Turtle Beach Corporation and HyperX (owned by HP Inc.), among others.
Video Collaboration    
Our primary competitors for Video Collaboration products include Cisco Systems, Inc., Poly (owned by HP Inc.), Jabra (owned by GN), AVer Information Inc., Neat and Yealink (Xiamen) Network Technology Co.Ltd, among others.
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Music 
Mobile Speakers: Our competitors for Bluetooth wireless speakers include Bose Corporation ("Bose"), Harman International Industries, Inc (owned by Samsung Electronics Co., Ltd., Harman owns JBL and has Harman Kardon as a division), and Beats Electronics LLC ("Beats") (owned by Apple), among others. Harman is our largest competitor. Personal voice assistants and other devices that offer music, such as Sonos, Amazon's Echo, Google Home (owned by Alphabet, Inc.) and Apple HomePod, also compete with our products. Amazon is also a significant customer of our products.
Audio & Wearables: For PC webcams are Microsoftspeakers, our competitors include Bose, Cyber Acoustics LLC, and Creative Labs, Inc., among others.
For PC headsets, our main competitors include Poly (owned by HP Inc.) and Jabra (owned by GN), among others. In-ear headphones competitors include Beats, Bose, Apple, Sony Corporation ("Sony"), JBL and Hewlett Packard.Sennheiser, among others.
Our competitors for Blue Microphones products include Rode Microphones LLC, Audio Technica Corporation, Samson Technologies Corp., Shure Incorporated, Razer and Apogee Electronics Corp., among others.
Intellectual Property and Proprietary Rights
Intellectual property rights that apply to Logitech's products and services include patents, trademarks, copyrights, and trade secrets.
We hold various United States patents and pending applications, together with corresponding patents and pending applications from other countries. While we believe that patent protection is important, we also believe that patents are of less competitive significance than factors such as technological expertise and innovation, ease of use, and quality design. No single patent is in itself essential to Logitech as a whole. From time to time, we receive claims that we may be infringing on patents or other intellectual property rights of others. As appropriate, claims are referred to legal counsel, and current claims are in various stages of evaluation and negotiation. If necessary or desirable, we may seek licenses for certain intellectual property rights. Refer also to the discussion in Item 1A Risk"Risk Factors—"We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the development of products that compete with our products." and "Claims by others that we infringe their proprietary technology could adversely affect our business."
To distinguish genuine Logitech products from competing products and counterfeit products, Logitech has used, registered, or applied to register certain trademarks and trade names in the U.S.United States and in other countries and jurisdictions. Logitech enforces its trademark and trade name rights in the U.S.United States and in other countries. In addition, the software for Logitech's products and services is entitled to copyright protection, and we generally require our customers to obtain a software license before providing them with that software. We also protect details about our products and services as trade secrets through employee training, license and non-disclosure agreements, technical measures and other reasonable efforts to preserve confidentiality.
Material Government Regulations
We conduct operations in a number of countries and we are subject to a variety of laws and regulations which vary from country to country. Such laws and regulations include, in addition to environmental regulations described below, tax, import/export and anti-corruption laws, varying accounting, auditing and financial reporting standards, import or export restrictions or licensing requirements, trade protection measures, custom duties, tariffs, import or export duties, and other trade barriers, restrictions and regulations.
While we incur increasing costs to comply with such other government regulations, we do not believe that our compliance with such requirements will have a material effect on our capital expenditures, competitive position, consolidated results of operations, earnings, or cash flows. Nonetheless, as discussed below, we believe that certain environmental, social and governance ("ESG") regulations could potentially materially impact our business.
For more information about such regulations and how they may impact us, see "Risks Related to our Global Operations and Regulatory Environment" and “We are subject to risks related to our environmental, social and governance ("ESG") activities and disclosures” in Item 1A "Risk Factors" and Note 7—Income Taxes in our Notes to consolidated financial statements below.
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Environmental Regulation
We are subject to laws andenvironmental regulations in manya number of jurisdictions, regulatingincluding the materials used in our products and, increasingly, product-related energy consumption, and the recycling of our products, batteries and packaging.following regulations:

Europe.    In Europe weTargeted Substances. Our operations are subject to regulation under various federal, state, local and foreign laws concerning the European Union's (EU's) RoHS (Restrictionenvironment, including laws addressing the discharge of Use of Certain Hazardous Substances in Electrical and Electronics Equipment) Directive 2011/65/EU, or RoHS 2. This directive restricts the placementpollutants into the EU marketair and water, the management and disposal of electricalhazardous substances and electronic equipment containingwastes, and the cleanup of contaminated sites. We could incur costs, including cleanup costs, fines and civil or criminal sanctions, and third-party damage or personal injury claims, if we were to violate or become liable under environmental laws.
Our products are subject to various federal, state, local and foreign laws governing chemical substances in products and their safe use, including laws regulating the manufacture and distribution of chemical substances and laws restricting the presence of certain hazardous materials including lead, mercury, cadmium, chromium, and halogenated flame-retardants. Allsubstances in electronics products.
Stewardship: In Europe, Logitech products are coveredregulated by the directive and have been modified, if necessary, to be RoHS 2 compliant. Logitech has an active program to ensure compliance with the RoHS 2 directive and to ensure RoHS 2 compliant components and manufacturing methods in order to comply with the requirements of the directive including issuing of a declaration of conformity and marking the product with the 'CE' mark.
Logitech is also subject to the EU's ErP (Energy-related Products) Directive, which aims to encourage manufacturers and importers to produce products designed to minimize overall environmental impact. Under the Directive, manufacturers must ensure that their energy-related products comply with applicable requirements, issue a declaration of conformity and mark the product with the 'CE' mark. The Directive does not have binding requirements for specific products, but does define conditions and criteria for setting, through subsequent implementing measures, requirements regarding environmentally relevant product characteristics. To date the following implementing measures within the ErP Directive are active and applicable to Logitech products:
1275/2008: Eco-design requirements for standby and off mode electric power consumption of electrical and electronic household and office equipment.
278/2009: Eco-design requirements for no-load condition power consumption and average active efficiency of external power supplies.
Logitech has assessed the applicability of implementing these measures on relevant product lines and has taken steps to ensure that our products meet the requirements. Adoption of the ErP Directive will be aligned in all EU member states, and we expect conformity will be demonstrated by Logitech in conjunction with current CE conformity marking requirements. Similar requirements exist in the four member states of the European Free Trade Association (Iceland, Norway, Liechtenstein and Switzerland). Such requirements are substantially met by compliance with the ErP Directive.
We are also subject to a number of EOL (End of Life) Stewardshipend-of-life stewardship directives including the EU's WEEE (WasteWaste Electrical and Electronic Equipment)Equipment (“WEEE”) Directive, the EU Packaging Directive and the EU Battery Directive, which require producers of electrical goods, packaging, and batteries to be financially responsible for costs of specifiedfinance the collection, recycling, treatment and disposal of coveredrelevant products. Where applicable, we have provided forSimilar legislation exists in many countries worldwide. There are stewardship costs associated with the estimated costs, which are not material,end-of-life collection, recycling and recovery of managing and recycling historical and future waste equipment,Logitech products, packaging and batteries. Logitech has also assessed the applicability of the European REACH Directive (Regulation (EC) No. 1907/2006 for Registration, Evaluation, Authorization, and Restrictions of Chemicals).batteries where Logitech is recognized as the steward and participates in relevant programs. The cost requirements are industry requirements and therefore do not subjectrepresent an undue burden relative to aspectsLogitech's competitive position.

Conflict Minerals: Sourcing of this Directive which relate to chemical substance import and control due to our current manufacturing structure. The aspect of this Directive that relates to product content does impact Logitech, and we have taken steps to ensure that all substances of very high concern (on a list of candidate substances for authorization thatcertain metals is published on the EU Agency-Web site) present in products above a concentration limit are eliminated in subsequent product designs or notified per the Directive requirements. Additions to this list of candidate substances are reviewed on a regular basis to give consideration to any updates to the substances of very high concern (SVHC) list performed by the relevant EU agency.
China.    In China we are subject to China's law on Management Methods on the Control of Pollution Caused by Electronic Information Products (China RoHS). This is substantially similar to the EU RoHS Directive, and as such, Logitech products are already compliant. China RoHS requires additional labeling of product that will be shipped in China and Logitech has taken steps to help ensure we comply with these requirements.
United States and Canada.    In the U.S., we are subject to, among other laws, Appliance Efficiency Regulations adopted via the U.S. Energy Independence and Security Act of 2007. The regulations set out standards for the energy consumption performance of products within the scope of the regulations, which includes some of Logitech's products. The standards apply to appliances sold or offered for sale throughout the U.S., and Logitech has redesigned or changed products to comply with these regulations. We are also subject to California's Proposition 65, which requires that clear and reasonable warnings be given to consumers who are exposed to certain chemicals deemed by the state of California to be dangerous.
Logitech is also subject to the requirement as set out byregulated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, specifically Section 1502, which addresses the use of "Conflict Minerals" in the supply chain. Similar legislation is emerging in other countries worldwide. We have established systems which facilitate our compliance with the sourcing, traceability and traceabilityreporting obligations and the reporting requirements of this Act aligned with guidelines published by the Securities and Exchange Commission.

As an EICC (Electronic Industry Citizenship Coalition)a member Logitech is participatingof the Responsible Business Alliance (“RBA”) and the Responsible Minerals Initiative ("RMI"), we participate in the industry-wide Conflict FreeConflict-Free Sourcing Initiative and its Conflict Free SmelterResponsible Minerals Assessment Program by which these(“RMAP”). The RMAP standards are considered industry best practice and are developed to meet the requirements will be met.of the OECD Due Diligence Guidance, the Regulation ("EU") 2017/821 of the European Parliament and the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act.
In addition,
Modern Slavery: Our commitment to combat slavery and human trafficking is underpinned by the Transparency in Supply Chain Act of 2010 (S.B. 657) is effective from Logitech's fiscal year 2012. The law requires all retailers, the United Kingdom Modern Slavery Act of 2015, the California Transparency in Supply Chains Act of 2010, the Australian Modern Slavery Act of 2018 and manufacturersexisting or emerging similar legislation worldwide. We utilize our formalized commitment to the United Nations Global Compact ("UNGC") adherence to the RBA code of tangible products who do business in Californiaconduct and have annual worldwide gross receipts exceeding $100 milliontransparently report our programs to disclose on their company websites their efforts to combat forced laboridentify and eradicate slavery and human trafficking in their ownour global supply chains. Logitech's

Climate & Carbon: Our operations, supply chain and products are not currently subject to carbon pricing or other legally required carbon taxation or penalties. We have made a voluntary adherence to the Paris Accord international agreement for climate action and we have developed and adopted the principle of Design for Sustainability ("DfS") and Carbon Transparency to catalyze reductions in our corporate carbon footprint, uptake of renewable power and materials and our journey to net zero. With our annual Sustainability Report and Carbon Disclosure Project reports, we report progress, risks and opportunities around climate and carbon.

Our operations, supply chain and our products are expected to become increasingly subject to federal, state, local and foreign laws, regulations and international treaties relating to climate change, such as climate disclosure, carbon pricing or product energy efficiency requirements, requiring us to comply or potentially face market access limitations or other sanctions including fines. We strive to continually improve the energy and carbon efficiency of our operations, supply chain and product portfolio through our DfS deployment during product development. We are committed to carbon transparency through product carbon footprint labeling and ensuring that the consumer is posted onengaged and aware of the impact of their purchase. We believe that this consumer centric approach is fundamental in moving towards a more sustainable future and we are collaborating with industry and business groups to find and promote ways to achieve broader adoption of this approach.

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Energy: A number of our Web site, www.logitech.com.
In Canada and the United States, weproducts are subject to laws in various Canadian provincesfederal, state, local and U.S. states that impose fees to cover the cost of end of life responsible disposal and recycling of packaging, product and batteries. These laws require producers of electrical goods, packaging and batteries to be financially responsible for costs of specified collection, recycling, treatment and disposal of covered products. Where applicable, we have provided for the estimated costs, which are not material, of managing and recycling historical and future waste equipment, packaging and batteries.
Australia and New Zealand.    In Australia and New Zealand, we are subject to the MEPS (Minimum Energy Performance Standards) regulations. These regulations set out standards for the energy consumption performance of products within the scope of the regulations, which includes some of Logitech's products. We have taken steps to modify products to ensure they are in compliance with MEPS.
We expect furtherforeign laws governing productenergy management or encouraging manufacturers and packaging recyclingimporters to be introduced in other jurisdictions, many or most of which could impose feesproduce products designed to cover recycling costs, the cumulative impact of which could be significant. If such legislation is enacted in other countries, Logitech intends to develop compliance programs as necessary. However, until that time, we are not able to estimate any possibleminimize overall environmental impact.

The effects on Logitech's business of complying with other governmentthese environmental regulations currently are limited to the cost of agency fees and testing as well as the time required to obtain agency approvals. There are also stewardship costs associated with the end of life collection, recycling and recovery of Logitech products, packaging and batteries where Logitech is recognized as the steward and participates in relevant programs. The costs and schedule requirements are industry requirements and therefore do not represent an undue burden relative to Logitech's competitive position. As regulations change, we will modify our products or processes to address those changes.
Seasonality
Our product sales are typically seasonal. Sales are generally highest during our third fiscal quarter (October to December) primarily due to the increased consumer demand for our products during the year-end holiday buying season.season and year-end spending by enterprises. Cash flow is correspondingly lower in the first half of our fiscal year as we typically build inventories in advance for the third quarter and we pay an annual dividend following our Annual General Meeting, which is typically in September. Due to the timing of our new product introductions, which could occur at any point during the fiscal year, we believe that year-over-year comparisons are more indicative of variability in our results of operations than the current quarter to prior quarter comparisons.
Materials
We purchase certain products and key components used in our products from a limited number of sources. If the supply of these products or key components, such as micro-controllers and optical sensors, were to be delayed or constrained, or if one or more of our single-source suppliers goes out of business, we might be unable to find a new supplier on acceptable terms, or at all, and our shipments to our customers could be delayed. In addition, leadLead times for materials, components, and products ordered by us or by our contract manufacturers can vary significantly and depend on factors such as contract terms, demand for a component, our ability to forecast product demand, and supplier capacity. From time to time, we have experienced component shortages and extended lead times on semiconductors, such as micro-controllers and optical sensors, and base metals used in our products. Shortages or interruptions in the supply of components or subcontracted products, or our inability to procure these components or products from alternate sources at acceptable prices in a timely manner, could delay shipment of our products or increase our production costs.
Human Capital Resources
Employees
Our human capital resources include persons employed directly by us or indirectly through contingent workforce arrangements. As of March 31, 20162023, we employed approximately 5,900 regular employees,7,400 persons, of which approximately 3,250 employees are2,400 were employed, directly and indirectly, in our Suzhou manufacturing facility, and from the remaining 2,650 regular employees, approximately 600 are dedicated to research and development.operations. None of Logitech's U.S. direct employees are represented by a labor union or are subject to a collective bargaining agreement. Certain other countries, such as China, provide by law for employee rights, which include requirements similar to collective bargaining agreements. We believe that our employee relations are good.

We rely on different programs and initiatives to support our goals. Some of our key human capital management programs are summarized below.
Executive OfficersDiversity and Inclusion

We believe that reflecting the diverse world in which we live - through our people and by fostering an inclusive culture - provides us with the foundation needed to create experiences that enable all people to pursue their passions, which is our corporate purpose. Our direct employees are located across Americas, EMEA and Asia-Pacific and bring a range of perspectives and skills to Logitech. As of March 31, 2023, 46% of our office employees were located in Asia-Pacific, 30% in the Americas, and 24% in EMEA. As of March 31, 2023, females represented 38% of our global office employees, 36% of our manufacturing workforce, and 34% were in managerial roles. In the U.S., underrepresented minorities (defined as Black or African American, Asian, Hispanic or Latino, American Indian or Alaska Native, and Native Hawaiian or Other Pacific Islander) represented 47% of our workforce, and 44% were in managerial roles.

To foster a more inclusive environment, we offer training sessions to emphasize awareness of self, bias and privilege, and inclusion. In addition, to measure our employees’ satisfaction at Logitech, we distribute a bi-annual employee engagement survey. Most recently, we conducted a survey in December 2022, in which 85% of our global office employees participated. As part of the Registrantsurvey, employees provided weighted feedback on their experience at Logitech, on measures such as happiness, retention and their perspective on our current state of workplace inclusivity at Logitech.

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Safety, Health and Well-being

We look to safeguard the safety, health and well-being of all members of the Logitech team. We implement training and communication programs across the business each year to ensure employee awareness of the importance of health and safety management and our key programs and provisions. To help us ensure the safety, health and well-being of employees at our production facility in Suzhou, China, we follow the RBA Code of Conduct and have an Environmental, Health and Safety ("EHS") Management System that is certified to ISO 14001 and ISO 45001. We implement the RBA Code as a full supply chain initiative. Further, we operate an audit and verification program to verify compliance with the RBA code. We believe health and well-being are critical to our employee’s personal and professional success and provide, in addition to healthcare benefits, wellness tools, resources and programs designed to help employees achieve good physical, financial, emotional, intellectual and social well-being.

Talent Acquisition and Development

Our geographic diversity gives Logitech an excellent foundation to recruit diverse talent from around the world. We believe that the entire talent process must be executed through a lens of equity and inclusion. We provide learning and development tools and resources to all our employees through our key programs. Our talent development program includes a dedicated training center at our production facility, a number of workshop-based, leadership development, mentorship, coaching career development and team building programs that remain available remotely.
Information About Our Executive Officers. The following sets forth certain information regarding our executive officers as of March 31, 2016:
May 17, 2023:
NameAgeNationalityPosition
Guerrino De Luca63Italian and U.S.Executive Chairman of the Board
Bracken Darrell5360U.S.President, and Chief Executive Officer and Director
Vincent PiletteCharles Boynton4455BelgianU.S.Chief Financial Officer
Marcel StolkPrakash Arunkundrum48DutchU.S.Sr. Vice President, Consumer Computing Platforms Business GroupChief Operating Officer
L. Joseph SullivanSamantha Harnett6247U.S.Sr. Vice President, Worldwide OperationsChief Legal Officer and Corporate Secretary
Guerrino De Luca has served as Chairman of the Logitech Board of Directors since 2008. Mr. De Luca served as Chief Executive Officer from April 2012 to January 2013 and acting President and Logitech's Chief Executive Officer from July 2011 to April 2012. Previously, Mr. De Luca served as Logitech's President and Chief Executive Officer from February 1998, when he joined the Company, to January 2008. He has been an executive member of the Board of Directors since June 1998. Prior to joining Logitech, Mr. De Luca served as Executive Vice President of Worldwide Marketing for Apple Computer, Inc., a consumer electronics and computer company, from February 1997 to September 1997, and as President of Claris Corporation, a U.S. personal computing software vendor, from May 1994 to February 1997. Prior to joining Claris, Mr. De Luca held various positions with Apple in the United States and in Europe. Mr. De Luca holds a Laurea degree in Electronic Engineering from the University of Rome, Italy.
Bracken Darrell joined Logitech as President in April 2012 and became Chief Executive Officer in January 2013. Prior to joining Logitech, Mr. Darrell served as President of Whirlpool EMEA and Executive Vice President of Whirlpool Corporation, a home appliance manufacturer and marketing company, from January 2009 to March 2012. Previously, Mr. Darrell had been Senior Vice President, Operations of Whirlpool EMEA from May 2008 to January 2009. From 2002 to May 2008, Mr. Darrell was with P&G (Thethe Procter & Gamble Company)Company ("P&G"), a consumer brand company, most recently as the President of its Braun GmbH subsidiary. Prior to rejoining P&G in 2002, Mr. Darrell served in various executive and managerial positions with General Electric Company from 1997 to 2002, with P&G from 1991 to 1997, and with PepsiCo Inc. from 1987 to 1989. Mr. Darrell holds a BA degree from Hendrix College and an MBA from Harvard University.
Vincent PiletteCharles Boynton joined Logitech in September 2013 as Chief Financial Officer.Officer in February 2023. Prior to joining Logitech, Mr. PiletteBoynton served as the Executive Vice President, Chief Financial Officer of Electronics for Imaging,Plantronics, Inc. (dba Poly), a technology company specializing in video and video solutions as well as team collaboration, from March 2019 to October 2022. Prior to joining Poly, Mr. Boynton served as Executive Vice President and Chief Financial Officer of SunPower Corporation, a global energy company and provider of solar power solutions, from March 2012 to May 2018, and continued as an Executive Vice President until July 2018. Mr. Boynton also served as the Chairman and Chief Executive Officer of 8point3 General Partner LLC, the general partner of 8point3 Energy Partners LP, an affiliate of SunPower, from March 2015 to June 2018. From 2010 to 2018, Mr. Boynton held various leadership positions at SunPower, including Principal Accounting Officer, Acting Chief Financial Officer and Vice President, Finance and Corporate Development. Earlier in his career, Mr. Boynton held key financial positions at Intelliden, Commerce One, Inc., a digital printing innovationKraft Foods, Inc., and solutions company, from January 2011 through August 2013. From January 2009 through December 2010, he served as Vice PresidentGrant Thornton, LLP. Mr. Boynton currently serves on the Board of Finance forDirectors of Nextracker Inc. Mr. Boynton earned his master’s degree in business administration at the Enterprise Server, Storage and Networking Group at Hewlett-Packard Company ("HP"). Prior to this role, Mr. Pilette served as Vice President of Finance for the HP Software Group from December 2005 through December 2008. Mr. Pilette held various other finance positions at HP, in the U.S and Europe, Middle East and Africa, since joining HP in 1997. Mr. Pilette holds an MS in Engineering and Business from Université Catholique de Louvain in Belgium and an MBA from Kellogg School of Management at Northwestern University.University and holds a Bachelor of Science degree in Accounting from the Kelley School of Business at Indiana University Bloomington.
Marcel StolkPrakash Arunkundrum is Logitech’s Chief Operating Officer, a position he has held since February 2023. He was previously Logitech's Head of Global Operations & Sustainability, a role he held from May 2018. He joined Logitech in March 20112015 and held operations positions as Vice President SalesNew Product Introductions & Strategic Initiatives from August 2015 to July 2016 and Marketing EMEA and Executive Managing Director EMEA, and was appointed Senior Vice President Consumer Computing Platforms Business Group in January 2013. Previously, Mr. Stolk was the Senior Vice President, Worldwide SalesGlobal Sourcing and Marketing at Logitech,New Product Introductions from March 2001July 2016 to October 2005, and held a number of positions within the sales and marketing functions at Logitech from 1991 to 2001. Prior to rejoining Logitech in 2011, he was the Chief Executive Officer of SourceTag BV, a software company for unique tagging of Cloud-based data, from September 2010 to March 2011. Mr. Stolk has also been the founder and Chief Executive Officer of Adoria Investments BV, a private equity company, from October 2005 to July 2010, and he remains the sole owner. Before joining Logitech in 1991, Mr. Stolk held various sales and product marketing positions at Aashima Technology BV, a provider of PC components and accessories, in the Netherlands. Mr. Stolk studied at Utrecht in the Netherlands and has participated in university-level executive courses, including an executive training course at Stanford University.
L. Joseph Sullivan joined Logitech in October 2005 as Vice President, Operations Strategy, and was appointed Senior Vice President, Worldwide Operations in April 2006.May 2018. Prior to joining Logitech, Mr. SullivanArunkundrum was a Principal at A.T. Kearney, a global management
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consulting firm, from July 2014 to August 2015. He also served as Director, Management Consulting at PricewaterhouseCoopers, a multinational professional services network of firms, from September 2011 to July 2014 and Principal at PRTM Management Consultants LLC, a management consulting firm acquired by PricewaterhouseCoopers, from March 2010 to September 2011. Prior to his management consulting roles, Mr. Arunkundrum held several management positions at i2 Technologies, a supply chain management company acquired by JDA Software, from March 2007 to February 2010. Early in his career, he held product management positions at supply chain startups and i2 Technologies. Mr. Arunkundrum holds a BTech degree in Chemical Engineering from Central ElectroChemical Research Institute ("CECRI") in Karaikudi, India and a Master of Science in Materials Engineering from University of Maryland at College Park.
Samantha Harnett joined Logitech as General Counsel in June 2020 and became Chief Legal Officer in April 2023. Prior to joining Logitech, Ms. Harnett served in various legal and management roles at Eventbrite, Inc., a global self-service ticketing and experience technology platform, most recently as Chief Legal and Operations Officer from October 2019 to June 2020. While at Eventbrite, she also served as Senior Vice President, General Counsel from May 2018 to October 2019 and Vice President, General Counsel from November 2015 to May 2018. From March 2005 to November 2015, Ms. Harnett served in various positions at ZipRealty, Inc., a real estate technology and online brokerage company, including most recently as General Counsel and Senior Vice President of Operational ExcellenceBusiness Development from October 2009 to November 2015. She also served as an associate at Wilson Sonsini Goodrich and Quality for Carrier Corporation, a subsidiary of United Technologies, from 2001 to 2005. Previously, he was with ACCO Brands, Inc. in engineering and manufacturing management roles from 1998

to 2001. Mr. SullivanRosati, P.C. Ms. Harnett holds a BSBA degree in Marketing Managementfrom California State University, Chico and an MBA degree in Operations Managementa JD from SuffolkSanta Clara University in Massachusetts.School of Law.
Available Information
Our Investor Relations Web sitewebsite is located at http:https://ir.logitech.com. We post and maintain an archive of our earnings and other press releases, current reports, annual and quarterly reports, earnings release schedule, information regarding annual general meetings, further information on corporate governance, and other information regarding the Company on the Investor Relations Web site.website. The information we post includes filings we make with the U.S. Securities and Exchange Commission (SEC),SEC, including reports on Forms 10-K, 10-Q, 8-K, and our proxy statement related to our annual shareholders' meeting and any amendments to those reports or statements filed or furnished pursuant to U.S. securities laws or Swiss laws. All such filings and information are available free of charge on the Web site,website, and we make them available on the Web sitewebsite as soon as reasonably possible after we file or furnish them with the SEC. The contents of these Web siteswebsites are not intended to be incorporated by reference into this report or in any other report or document we file and our references to these Web siteswebsites are intended to be inactive textual references only.
In addition, Logitech publishes press releases upon the occurrence of significant events within Logitech. Shareholders and members of the public may elect to receive e-mailsalerts when Logitech issues press releases upon the occurrence of significant events within Logitech or other press releases by subscribing through
http://ir.logitech.com/alerts.cfm.
As a Swiss company traded on the SIX Swiss Exchange, and as a company subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended, we file reports on transactions in Logitech securities by members of Logitech's Board of Directors and executive officers. The reports that we file with the Securities and Exchange Commission on Forms 3, 4 and 5, along with our other SEC filings, may be accessed on our Web sitewebsite or on the Securities and Exchange Commission's Web sitewebsite at http://www.sec.gov, and the reports we file that are published by the SIX Swiss Exchange may be accessed at: at
http://www.six-exchange-regulation.com/obligations/management_transactions_en.html.
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ITEM 1A.    RISK FACTORS
The risk factors summarized and disclosed below could adversely affect our business, results of operations and financial condition, and may cause volatility in the price of our shares. These are not all the risks we face and other factors not presently known to us or that we currently believe are immaterial may also affect our business if they occur. See also the other information set forth in this Annual Report on Form 10-K, including in Part I, Item 1 "Business," Part II, Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and our Consolidated Financial Statements and the related Notes.
Summary of Risk Factors

Risks Related to our Business

•If we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories, our business and operating results could be adversely affected.

•If we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results and future growth could be adversely affected.

•We purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.

•Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations.

•If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales and our business and operating results could be adversely affected.

•If we are not able to maintain and enhance our brands, or if our brands or reputation are damaged, our reputation, business and operating results could be adversely affected.

•If we do not compete effectively, demand for our products could decline and our business and operating results could be adversely affected.

•We rely on third parties to sell and distribute our products, and we rely on their information to manage our business. Disruption of our relationship with these channel partners, changes in or issues with their business practices, their failure to provide timely and accurate information, changes in distribution partners, practices or models, conflicts among our channels of distribution, or failure to build and scale our own sales force for certain product categories and enterprise channel partners could adversely affect our business, results of operations, operating cash flows and financial condition.

•If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected.

•Our business depends in part on access to third-party platforms or technologies, and if access thereto is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.

•Our success largely depends on our ability to manage, hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior leadership. Our strategy and our ability to innovate, design
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and produce new products, sell products, maintain operating margins and control expenses depend on key personnel that may be difficult to replace.

•As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories, or pursuing strategic acquisitions and investments, which could have an adverse impact on our business.

•As we continue our efforts to lower our costs and improve our operational efficiency, we may not fully realize our goals.

•Product quality issues could adversely affect our reputation, business and operating results.

Risks Related to Global Nature of our Operations and Regulatory Environment

•Adverse global and regional economic and geopolitical conditions can materially adversely affect our business, results of operations and financial condition.

•We conduct operations in a number of countries and have invested significantly in growing our sales and marketing activities in China, and the effect of business, legal and political risks associated with international operations could adversely affect us.

•Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs and the resulting consequences, may have adverse impacts on our business, results of operations and financial condition.

•Our financial performance is subject to risks associated with fluctuations in currency exchange rates.

•We are subject to risks related to our environmental, social and governance ("ESG") activities and disclosures.

•As a company operating in many markets and jurisdictions, expanding into new growth categories, and engaging in acquisitions, and as a Swiss, dual-listed company, we are subject to risks associated with new, existing and potential future laws and regulations.

•As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase, which could adversely affect our net income and cash flows.

•We maintain cash and cash equivalents at financial institutions and are exposed to credit risk in the event of default by such financial institutions.

Risks Related to Confidential Information, Cybersecurity, Privacy, and Intellectual Property

•Losses or unauthorized access to or releases of confidential information could adversely affect our business and result in significant reputational, financial and legal consequences.

•The collection, storage, transmission, use and distribution of personal data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.

•Claims by others that we infringe their proprietary technology could adversely affect our business.

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•We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the development of products that compete with our products.

Risks Related to our Financial Results

•Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares.

•Our revenues and profitability are difficult to predict due togross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.

•We cannot ensure that our share repurchase programs will be fully utilized or that it will enhance long-term shareholder value. Share repurchases may also increase the naturevolatility of the markets in which we compete, fluctuating user demand, the uncertainty of current and future global economic conditions, and for many other reasons, including the following:
Our operating results are highly dependent on the volume and timing of orders received during the quarter, which are difficult to forecast. Customers generally order on an as-needed basis and we typically do not obtain firm, long-term purchase commitments from our customers. As a result, our revenues in any quarter depend primarily on orders booked and shipped in that quarter.
A significant portion of our quarterly retail sales typically occurs in the last weeks of each quarter, further increasing the difficulty in predicting quarterly revenues and profitability.
Our sales are impacted by consumer demand and current and future global economic conditions, and can therefore fluctuate abruptly and significantly during periods of uncertain economic conditions or geographic distress, as well as from shifts in distributor inventory practices and consumer buying patterns.

We must incur a large portion of our costs in advance of sales orders, because we must plan research and production, order components, buy tooling equipment, and enter into development, sales and marketing, and other operating commitments prior to obtaining firm commitments from our customers. This makes it difficult for us to rapidly adjust our costs during the quarter in response to a revenue shortfall, which could adversely affect our operating results.

In the first quarter of fiscal year 2016 we had substantially completed the implementation of our turnaround strategy that began in fiscal year 2013. As part of our turnaround strategy, we have attempted to simplify our organization, to reduce operating costs through expense reduction and global workforce reductions, to reduce the complexity of our product portfolio, and to better align costs with our current business as we

attempt to expand from PC accessories to growth opportunities in accessories and other products for music, gaming, video collaboration, digital home, mobile devices and other product categories. We may not achieve the cost savings or other anticipated benefits from these efforts, and such efforts may cause our operating results to fluctuate from quarter to quarter, making our results difficult to predict.

Fluctuations in currency exchange rates can impact our revenues, expenses and profitability because we report our financial statements in U.S. Dollars, whereas a significant portion of our revenues and expenses are in other currencies. We attempt to adjust product prices over time to offset the impact of currency movements. However, over short periods of time, during periods of weakness in consumer spending or given high levels of competition in many product categories, our ability to change local currency prices to offset the impact of currency fluctuations is limited.
Because our operating results are difficult to predict, our results may be below the expectations of financial analysts and investors, which could cause thetrading price of our sharesshares. We similarly cannot ensure that we will continue to decline.increase our dividend payments or to pay dividends at all. Share repurchases and dividends diminish our cash reserves.

Risk Factors

Risks Related to our Business

If we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories, our business and operating results could be adversely affected.
 
Our product categories are characterized by short product life cycles, intense competition, frequent new product introductions, rapidly changing technology, dynamic consumer demand and evolving industry standards. As a result, we must continually innovate in our new and existing product categories, introduce new products and technologies, and enhance existing products in order to remain competitive.
 
The success of our product portfolio depends on several factors, including our ability to:


•Identify new features, functionality and opportunities;
 
•Anticipate technology, market trends and consumer preferences;


•Develop innovative, high-quality, and reliable new products and enhancements in a cost-effective and timely manner;
 
•Distinguish our products from those of our competitors; and
 
•Offer our products at prices and on terms that are attractive to our customers and consumers.
If we do not execute on these factors successfully, products that we introduce or technologies or standards that we adopt may not gain widespread commercial acceptance, and our business and operating results could suffer. In addition, if we do not continue to differentiate our products through distinctive, technologically advanced features, designs, and services that are appealing to our customers and consumers, as well as continue to build and strengthen our brand recognition and our access to distribution channels, our business could be adversely affected.
 
The development of new products and services iscan be very difficult and requires high levels of innovation. The development process is also can be lengthy and costly. There are significant initial expenditures for research and development, tooling, manufacturing processes, inventory and marketing, and we may not be able to recover those investments. If we fail to accurately anticipate technological trends or our users’ needs or preferences, are unable to complete the development of products and services in a cost-effective and timely fashion or are unable to appropriately increase production to fulfill customer demand, we will be unable to successfully introduce new products and services into the market or compete with other providers. Even if we complete the development of our new products and services in a cost-effective and timely manner, they may not be not competitive with products developed by others, they may not achieve acceptance in the market at anticipated levels or at all, they may not be profitable or, even if they are profitable, they may not achieve margins as high as our expectations or as high as the margins we have achieved historically.
 
As we introduce new or enhanced products, integrate new technology into new or existing products, or reduce the overall number of products offered, we face risks including, among other things, disruption in customers’ ordering patterns, excessive levels of new and existing product inventories, revenue deterioration in our existing product lines, insufficient supplies of new products to meet customers’ demand, possible product and technology defects, and a potentially different sales and support environment. Premature announcements or leaks of new

products, features or technologies may exacerbate some of these risks by reducing the effectiveness of our product launches, reducing sales volumes of current products due to anticipated future products, making it more difficult to
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compete, shortening the period of differentiation based on our product innovation, straining relationships with our partners or increasing market expectations for the results of our new products before we have had an opportunity to demonstrate the market viability of the products. Our failure to manage the transition to new products and services or the integration of new technology into new or existing products and services could adversely affect our business, results of operations, operating cash flows and financial condition.
 
We believe sales of PCs will continue to decline, and that our future growth will depend on our diversified product growth opportunities beyond the PC, and ifIf we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, or if our sales of PC peripherals are less than we expect, our operating results and future growth could be adversely affected.
We have historically targeted peripherals for the PC platform. Consumer demand for PCs, especially in our traditional, mature markets such as North America, Western and Nordic Europe, Japan and Australia, has been declining and we expect it to continue to decline in the future. As a result, consumer demand for PC peripherals in many of our markets is slowing and in some cases declining and we expect this trend may continue.

Our sales of PC peripherals might be less than we expect due to a decline in business or economic conditions in one or more of the countries or regions, a greater decline than we expect in demand for our products, our inability to successfully execute our salesfuture growth depends on growth opportunities and marketing plans, or for other reasons. Global economic concerns, such as the varying pace of global economic recovery, the impact of sovereign debt issues in Europe, the impact of low oil prices on Russia and conflicts with either local or global financial implications in places such as Russia and Ukraine, and economy slowdown in China, create unpredictability and add risk to our future outlook.
As a result, we are focusing more ofattempting to diversify our attention, which may include the personnel, financial resources, and management attention on product innovations and growth opportunities, including products for the consumption of digital music, products for gaming, products for video collaboration, products for the digital home, and on other potential growth opportunities.category portfolio. Our investments may not result in the growth we expect, or when we expect it, for a variety of reasons, including those described below.

Music. We are focused on products for the consumption of digital music as a continued salesbut not limited to, changes in growth area. For example, we recently acquired Jaybird to expand into the wireless audio wearables market. Competition in the mobile speaker and audio wearables categories is intense, and we expect it to increase. If we are not able to grow our existing and acquired product lines, introduce differentiated product and marketing strategies to separate ourselves from competitors, our mobile speaker and audio wearables efforts will not be successful, and our business and results of operations could be adversely affected.
Gaming.  We are building a diverse business that features a variety of gaming devices. The rapidlytrends, evolving and changing marketmarkets and increasing competition, increase the risk that if we do not allocate our resources in line with the market opportunities, and our business then our results of operations could be adversely affected.product innovation.


Video Collaboration. While we view the small and medium sized user groups' opportunity to be large and relatively unaddressed, this is a new and evolving market segment that we are developing. If the market opportunity proves to exist, we expect increasing competition from the strong competitors in the video conferencing market as well as potential new entrants.
Home. While we are a leader in programmable, performance remote controls for home entertainment, the smart home market is still in its early stages and it is not yet clear when the category will produce dynamic growth or which products will succeed and be able to take advantage of market growth or to help define and grow the market. Despite its early stages, the smart home market already is experiencing increasing competition from strong competitors.

In addition to our currentOur growth opportunities our future growthand those we may be reliant on our abilitypursue are subject to identifyconstant and develop potential new growth opportunities. This process is inherently risky and will result in investments in time and resources for which we do not achieve any return or value.

Each of these growth opportunities is subject to rapidly changing and evolving technologies and evolving industry standards and may be replaced by new technology concepts or platforms. Some of these growth categories and opportunities are also dependent on

characterized by short product cycles, frequent new product introductions and enhancements and rapidly changing and evolving consumer preferences with respect to design and features that require calculated risk-taking and fast responsiveness.responsiveness and result in short opportunities to establish a market presence. In addition, some of these growth categories and opportunities are characterized by price competition, erosion of premium-priced segments and average selling prices, commoditization, and sensitivity to general economic conditions and cyclical downturns. The growth opportunities and strength and number of competitors that we face in all of our product categories mean that we are at risk of new competitors coming to market with more innovative products that are more attractive to customers than ours or priced more competitively. If we do not develop innovative and reliable productsproduct offerings and enhancements in a cost-effective and timely manner that are attractive to consumers in these markets, if we are otherwise unsuccessful entering and competing in these growth opportunities,categories or responding to our many competitors and to the rapidly changing conditions in these growth categories, if the growth opportunitiescategories in which we invest our limited resources do not emerge as the opportunities or do not produce the growth or profitability we expect, or when we expect it, or if we do not correctly anticipate changes and evolutions in technology and platforms, our business and results of operations could be adversely affected.

In addition, we rely on our go-to-market capability to leverage on those growth opportunities, market our products and compete effectively with a goal of strengthening our sales. If we are not able to develop and maintain our go-to-market capabilities and processes, in particular the continued development of our enterprise salesforce and strategy, our business and results of operations could be adversely affected.

We purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.
We purchase certain products and key components from a limited number of sources. If the supply of these products or key components were to be delayed or constrained, impacted by global shortages of semiconductor chips, or if one or more of our single-source suppliers experience disruptions or go out of business as a result of adverse global economic conditions, natural disasters or regional or global pandemics, including COVID-19, we might be unable to find a new supplier on acceptable terms, or at all, and our product shipments to our customers could be delayed, which could adversely affect our business, financial condition and operating results.

Lead times for materials, components and products ordered by us or by our contract manufacturers can vary significantly and depend on factors such as contract terms, demand for a component, and supplier capacity. From time to time, we have experienced component shortages and extended lead times on semiconductors, such as microcontrollers and optical sensors, and base metals used in our products. Shortages or interruptions in the supply of components or subcontracted products, or our inability to procure these components or products from alternate sources at acceptable prices in a timely manner, could delay shipment of our products or increase our production costs, which could adversely affect our business and operating results.

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Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations.
We produce approximately 40% of our products at the facilities we own in China. The majority of our other production is performed by third-party contract manufacturers, including original design manufacturers, in China, Taiwan, Hong Kong, Malaysia, Thailand, Mexico, and Vietnam.

Our manufacturing operations in China have been in the past and could in the future be adversely affected by the COVID-19 pandemic, changes in the interpretation and enforcement of legal standards, strains on China’s available labor pool, changes in labor costs and other employment dynamics, high turnover among Chinese employees, infrastructure issues, import-export issues, cross-border intellectual property and technology restrictions, currency transfer restrictions, natural disasters, regional or global pandemics, conflicts or disagreements between China and Taiwan or China and the United States, labor unrest, and other trade customs and practices that are dissimilar to those in the United States and Europe. Interpretation and enforcement of China’s laws and regulations continue to evolve, and we expect differences in interpretation and enforcement to continue in the foreseeable future.
Our manufacturing operations at third-party contractors could be adversely affected by contractual disagreements, by labor unrest, by natural disasters, by regional or global pandemics, such as the COVID-19 pandemic, by wars and armed conflicts, by strains on local communications, trade, and other infrastructures, by competition for the available labor pool or manufacturing capacity, by increasing labor and other costs, and by other trade customs and practices that are dissimilar to those in the United States and Europe.

Further, we have been exposed in the past and may be exposed to fluctuations in the value of the local currency in the countries in which manufacturing occurs. Future appreciation of these local currencies could increase our component and other raw material costs. In addition, our labor costs could continue to rise as wage rates increase and the available labor pool declines. These conditions could adversely affect our financial results.

If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales and our business and operating results could be adversely affected.
If we do not successfully coordinate the timely manufacturing and distribution of our products, if our manufacturers, distribution logistics providers or transport providers are not able to successfully and timely process our business or if we do not receive timely and accurate information from such providers, and especially if we expand into new product categories or our business grows in volume, we may have an insufficient supply of products to meet customer demand or experience a build-up in inventory. As a result, we could lose sales or incur additional costs which could adversely affect our financial performance.
By locating our manufacturing in China and Southeast Asia, we are reliant on third parties to get our products to distributors around the world. Transportation costs, fuel costs, labor unrest, natural disasters, regional or global pandemics, military conflicts, and other adverse effects on our ability, timing and cost of delivering products can increase our inventory, decrease our margins, adversely affect our relationships with distributors and other customers and otherwise adversely affect our results of operations and financial condition.

A significant portion of our quarterly retail orders and product deliveries generally occur in the last weeks of the fiscal quarter. This places pressure on our supply chain and could adversely affect our revenues and profitability if we are unable to successfully fulfill customer orders.

If we are not able to maintain and enhance our brands, or if our brands or reputation are damaged, our reputation, business and operating results could be adversely affected.

We have developed long-term value in our brands and have invested significantly in design and in our existing and new brands over the past several years. We believe that our design and brands have significantly contributed to the success of our business and that maintaining and enhancing our brands is very important to our future growth and success. Maintaining and enhancing our brands will require significant investments and will depend largely on our future design, products and marketing, which may not be successful and may damage our brands. Our brands and reputation are also dependent on third parties, such as suppliers, manufacturers, distributors, retailers, product
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reviewers and the media as well as online consumer product reviews, consumer recommendations and referrals. It can take significant time, resources and expense to overcome negative publicity, reviews or perception. Any negative effect on our brands, regardless of whether it is in our control, could adversely affect our reputation, business and results of operations.
 
If we do not compete effectively, demand for our products could decline and our business and operating results could be adversely affected.
 
The peripherals industry in which we operate is intensely competitive. Most of our product categories are characterized by large, well-financed competitors with strong brand names and highly effective research and development, marketing and sales capabilities, short product life cycles, continual performance enhancements, and rapid adoption of technological and product advancements by competitors in our retailproduct markets. We also experience aggressive price competition and other promotional activities from our primary competitors and from less-established brands, including brands owned by retail customers known as house brands. As we shift the focus of our marketing efforts in certain categories from a push model to a demand-generating pull model, the pressures from this competition and from our distribution channels, combined with the implementation risks of such a strategy shift, could adversely affect our competitive position, market share and business. In addition, our competitors may offer customers terms and conditions that may be more favorable than our terms and conditions and may require us to take actions to maintain or increase our customer incentive programs, which could impact our revenues and operating margins.

In recent years, we have expanded the categories of products we sell, and entered new markets. We remain alert to opportunities in new categories and markets. As we do so, we are confronting new competitors, many of which have more experience in the categories or markets and have greater marketing resources and brand name recognition than we have. In addition, because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater competition in the future from well-established consumer electronics companies in our developing categories as well as in future categories we might enter. Many of these companies, such as Microsoft, Apple, Google, Cisco, Sony Corporation, Polycom, Samsung and others, have greater financial, technical, sales, marketing and other resources than we have.
 
Microsoft, Apple, Google and GoogleAmazon are leading producers of operating systems, hardware, platforms and applications with which our mice, keyboards, wireless speakers and other products are designed to operate. In addition, Microsoft, Apple and Google each has significantly greater financial, technical, sales, marketing and other resources than Logitech, as well as greater name recognition and a larger customer base. As a result, Microsoft, Apple, Google and GoogleAmazon each may be able to improve the functionality of its products, if any, or may choose to show preference to our competitors' products, to correspond with ongoing enhancements to its operating systems, hardware and software applications before we are able to make such improvements. This ability could provide Microsoft, Apple, Google, Amazon or other competitors with significant lead-time advantages. In addition, Microsoft, Apple, Google, Amazon or other competitors may be able to control distribution channels or offer pricing advantages on bundled hardware and software products that we may not be able to offer, and may bemaybe financially positioned to exert significant downward pressure on product prices and upward pressure on promotional incentives in order to gain market share. For additional information, see "Competition” in Item 1 of this Annual Report on Form 10-K.

We rely on third parties to sell and distribute our products, and we rely on their information to manage our business. Disruption of our relationship with these channel partners, changes in or issues with their business practices, their failure to provide timely and accurate information, changes in distribution partners, practices or models, conflicts among our channels of distribution, or failure to build and scale our own sales force for certain product categories and enterprise channel partners could adversely affect our business, results of operations, operating cash flows and financial condition.

We primarily sell our products to a network of distributors, retailers, e-tailers and enterprise customers (together with our direct sales channel partners). We are dependent on those direct sales channel partners to distribute and sell our products to indirect sales channel partners and ultimately to consumers. The sales and business practices of all such sales channel partners, their compliance with laws and regulations, and their reputations - of which we may or may not be aware - may affect our business and our reputation.

While our overall distribution relationships are diffuse, in fiscal year 2023 and 2022 our gross sales were concentrated with three customers - Amazon Inc., Ingram Micro and TD Synnex - and their affiliated entities. We do not have long-term commitments with those customers. If online sales grow as a percentage of overall sales, we expect that we will become even more reliant on Amazon. While we believe that we have good relationships with Amazon, Ingram Micro and TD Synnex, any adverse change in those relationships could have an adverse impact on our results of operations and financial condition.

The impact of economic conditions, labor issues, natural disasters, regional or global pandemics, evolving consumer preferences, and purchasing patterns on our distribution partners, or competition between our sales channels, could result in sales channel disruption. Any loss of a major partner or distribution channel or other
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channel disruption could make us more dependent on alternate channels, increase pricing and promotional pressures from other partners and distribution channels, increase our marketing costs, or adversely impact buying and inventory patterns, payment terms or other contractual terms, sell-through or delivery of our products to consumers, our reputation and brand equity, or our market share.
 
MusicOur sales channel partners also sell products offered by our competitors and, in the case of retailer house brands, may also be our competitors. If product competitors offer our sales channel partners more favorable terms, have more products available to meet their needs, or utilize the leverage of broader product lines sold through the channel, or if our sales channel partners show preference for their own house brands, our sales channel partners may de-emphasize or decline to carry our products. In addition, certain of our sales channel partners could decide to de-emphasize the product categories that we offer in exchange for other product categories that they believe provide them with higher returns. If we are unable to maintain successful relationships with these sales channel partners or to maintain our distribution channels, our business will suffer.


Mobile Speakers.  OurAs we expand into new product categories and markets in pursuit of growth, we will have to build relationships with new channel partners and adapt to new distribution and marketing models. These new partners, practices and models may require significant management attention and operational resources and may affect our accounting, including revenue recognition, gross margins, and the ability to make comparisons from period to period. Certain product categories, such as Video Collaboration, also require that we further build and scale our own enterprise sales force. Several of our competitors for Bluetooth wireless speakers include Bose, JBL, Harmon Kardon,already have large enterprise sales forces and Beats Electronics. Bose isexperience and success with that sales model. If we are unable to build successful distribution channels, build and scale our largest competitor. Apple's ownershipown enterprise sales force, or successfully market our products in these new product categories, we may not be able to take advantage of Beats Electronics may impactthe growth opportunities, and our access to shelf space in Apple retail storesbusiness and adversely impact our ability to succeedgrow our business could be adversely affected.

We reserve for cooperative marketing arrangements, incentive programs and pricing programs with our sales channel partners. These reserves are based on judgments and estimates, using historical experience rates, inventory levels in this important growth market. Personal assistancedistribution, current trends and other devices that offer music,factors. There could be significant differences between the actual costs of such as Amazon's Echo, may also competearrangements and programs and our estimates. 

We use sell-through data, which represents sales of our products by our direct retailer and e-tailer customers to consumers, and by our distributor customers to their customers, along with other metrics, to assess consumer demand for our products. AmazonSell-through data is also a significant distributorsubject to limitations due to collection methods and the third-party nature of the data and thus may not be an accurate indicator of actual consumer demand for our products. The customers supplying sell-through data vary by geographic region and from period to period, but typically represent a majority of our retail sales. In addition, we rely on channel inventory data from our sales channel partners. If we do not receive this information on a timely and accurate basis, if this information is not accurate, or if we do not properly interpret this information, our results of operations and financial condition may be adversely affected.


Audio-PC & Wearables.If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected.
We use our forecasts of product demand to make decisions regarding investments of our resources and production levels of our products. Although we receive forecasts from our customers, many are not obligated to purchase the forecasted demand. Also, actual sales volumes for individual products in our retail distribution channel can be volatile due to changes in consumer preferences and other reasons. In addition, our products have short product life cycles, so a failure to accurately predict high demand for a product can result in lost sales that we may not recover in subsequent periods, or higher product costs if we meet demand by paying higher costs for materials, production and delivery. Our failure to predict low demand for a product can result in excess inventory, lower cash flows and lower margins if we are required to reduce product prices in order to reduce inventories.

If our sales channel partners have excess inventory of our products or decide to decrease their inventories for any reason, they may decrease the PC speakers category,number of products they acquire in subsequent periods, which could cause disruption in our business and adversely affect our forecasts and sales.

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In addition, market demand remains less predictable and more volatile than pre-COVID-19, partially due to the current macroeconomic and geopolitical conditions. As a result, we have experienced in the past and may continue experiencing large differences between our forecasts and actual demand for our products that may result in excess inventory or product unavailability, inventory and restructuring reserves, increases in operational logistics and other costs, damaged relationships with suppliers or customers, opportunities for our competitors, include Bose, Cyber Acoustics, Phillips and Creative Labs, Inc. In the PC headset business, our main competitors include Plantronics and Altec Lansing. In-ear headphones competitors include Skull Candy, Sennheiser, Sony, Beats, and others.

Gaming

Competitors for our Gaming products include Razer USA Ltd., SteelSeries, and Turtle Beach.
Video Collaboration

Our competitors for Video Collaboration products include Cisco Systems, Inc., Polycom, Inc., and Avaya, Inc.

Home

Remotes. Direct competitors in the remote control market include pro-installer-focused Universal Remote Control Inc., and new “DIY” entrants from Savant Systems and Ray Enterprises. Indirect competition exists in the form of low-end “replacement remotes” such as Sony, RCA, GE, pure app-based solutions for smartphones and other mobile devices such as Peel, as well as device and/or subscriber-specific solutions from TV makers such as Samsung and Vizio and MSOs such as Comcast and DirecTV.
Home Control. Competition in the home control market exists in form of home automation platforms such as Smart Things (owned by Samsung), Amazon with their Echo product, Nest (owned by Google), Wink and many other startups in the space. Many of these products and brands are partners with Logitech as well via integrations with Harmony remotes.
Creativity and Productivity

Pointing Devices. Microsoft Corporation is our main competitor. We also experience competition and pricing pressure from less-established brands, including house brands, which we believe have impacted ourlost market share in some sales geographies.and revenue. If we do not accurately predict product demand, our business and operating results could be adversely affected.

Keyboards & Combo. Microsoft Corporation and Apple Inc. are our main competitors in our keyboard and combo product lines. We also experience competition and pricing pressure for keyboard and combos from less-established brands, including house brands.

Tablet & Other Accessories. Competitors in the tablet case market include Apple, Otter, Speck and a large number of small brands. Competitors in the tablet keyboard market are Apple, Zagg, Kensington, Belkin, Targus and other less-established brands. Although we are one of the leaders in the tablet keyboard market and continue to bring innovative offerings to the market, we expect the competition will increase.

PC Webcams.  Our primary competitors for PC webcams are Microsoft and Hewlett Packard with various other manufacturers taking smaller market share. The worldwide market for consumer PC webcams has been declining, and as a result, fewer competitors have entered the market.

Our business depends in part on access to third-party platforms or technologies, and if the access thereto is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.
 
Our peripherals business has historically been built largely around the PC platform, which over time became relatively open, and its inputs and operating system standardized. With the growth of mobile, tablet, gaming and other computer devices, the number of platforms has grown, and with it the complexity and increased need for us to have business and contractual relationships with the platform owners in order to produce products compatible with these platforms. Our product portfolio includes current and future products designed for use with third-party platforms or software, such as the Apple iPad, iPod, and iPhone and Siri, Android phones and tablets.tablets, Google Assistant and Amazon Alexa. Our business in these categories relies on our access to the platforms of third parties, some of whom are our competitors. Platform owners that are competitors have a competitive advantage in designing products for their platforms and may produce peripherals or other products that work better, or are perceived to work better, than our products in connection with those platforms. As we expand the number of platforms and software applications with which our products are compatible, we may not be successful in launching products for those platforms or software applications, we may not be successful in establishing strong relationships with the new platform or software owners, or we may negatively impact our ability to develop and produce high-quality products on a timely basis for those platforms and software applications or we may otherwise adversely affect our relationships with existing platform or software owners.
 
Our access to third-party platforms may require paying a royalty, which lowers our product margins or may otherwise be on terms that are not acceptable to us. In addition, the third-party platforms or technologies used to interact with our product portfolio can be delayed in production or can change without prior notice to us, which can result in our having excess inventory, lower margins, lost investment in time and expense, or lower margins.lost opportunity cost.
 

If we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or changechanged without notice to us, our business and operating results could be adversely affected.

If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected.
We use our forecasts of product demand to make decisions regarding investments of our resources and production levels of our products. Although we receive forecasts from our customers, many are not obligated to purchase the forecasted demand. Also, actual sales volumes for individual products in our retail distribution channel can be volatile due to changes in consumer preferences and other reasons. In addition, our products have short product life cycles, so a failure to accurately predict high demand for a product can result in lost sales that we may not recover in subsequent periods, or higher product costs if we meet demand by paying higher costs for materials, production and delivery. We could also frustrate our customers and lose shelf space. Our failure to predict low demand for a product can result in excess inventory, lower cash flows and lower margins if we are required to reduce product prices in order to reduce inventories.

If our sales channel partners have excess inventory of our products or decide to decrease their inventories for any reason, they may decrease the amount of products they acquire in subsequent periods, causing disruption in our business and adversely affecting our forecasts and sales.
Over the past few years, we have expanded the types of products we sell, and the geographic markets in which we sell them. The changes in our product portfolio and the expansion of our sales markets have increased the difficulty of accurately forecasting product demand.

In addition, during fiscal year 2016 we increased the percentage of our products that we manufacture in our own facilities. This increases the inventory that we purchase and maintain to support such manufacturing. We are also utilizing sea shipments more extensively than air delivery, which will cause us to build and ship products to our distribution centers earlier and will also result in increases in inventory. These operational shifts increase the risk that we have excess or obsolete inventory if we do not accurately forecast product demand.

 We have experienced large differences between our forecasts and actual demand for our products. We expect other differences between forecasts and actual demand to arise in the future. If we do not accurately predict product demand, our business and operating results could be adversely affected.
 
Our success largely depends on our ability to manage, hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior management.leadership. Our strategy and our ability to innovate, design and produce new products, sell products, maintain operating margins and control expenses depend on key personnel that may be difficult to replace.
 
Our success depends on our ability to attract and retain highly skilled personnel, including senior managementleadership and international personnel. From time to time, we experience turnover in some of our senior managementleadership positions.
 
We compensate our employees through a combination of salary, bonuses, benefits and equity compensation. Recruiting and retaining skilled personnel, including software and hardware engineers, is highly competitive. If we fail to provide an attractive working environment and competitive compensation to our employees, it will be difficult to retain, hire and integrate qualified employees and contractors, and we may not be able to maintain and expand our business. If we do not retain or maintain the continuity of our senior managersleaders or other key employees for any reason, including voluntary or involuntary departure, death or permanent or temporary disability, we risk losing institutional knowledge, experience, expertise and other benefits of continuity as well as the ability to attract and retain other key employees. In addition, we must carefully balance the size of our employee base with our current infrastructure, management resources and anticipated operating cash flows. If we are unable to manage the size of our employee base, particularlyincluding but not limited to our engineers, product managers and designers and other functions, we may fail to developachieve our strategic and introduceoperational goals, including developing and introducing new products successfully and in a cost-effective and timely manner. If our revenue growth or employee levels vary significantly, our operating cash flows and financial condition could be adversely affected. Volatility or lack of positive performance in our stock price including declines in our stock prices in the past year, may also affect our ability to retain key employees, many of whom have been granted equity incentives. Logitech’s practice has been to provide equity incentives to its employees, but the number of shares available for equity grants is limited. We may find it difficult to provide competitive equity incentives, and our ability to hire, retain and motivate key personnel may suffer.

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As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories, or pursuing strategic acquisitions and investments, which could have an adverse impact on our business.
 
RecentlyWe regularly review our product portfolio and in past years, we have initiated reductions inupdate our workforcenon-strategic product categories and products. Discontinuing products with service components may cause us to aligncontinue to incur expenses to maintain services within the product life cycle or may adversely affect our employee base withcustomer and consumer relationships and brand. Divestitures may also involve warranties, indemnification or covenants that could restrict our business strategy,or result in litigation, additional expenses or liabilities. In addition, discontinuing product categories, even categories that we consider non-strategic, reduces the size and diversification of our anticipated revenue basebusiness and causes us to be more dependent on a smaller number of product categories.
As we attempt to grow our business in strategic product categories and emerging market geographies, we evaluate acquisition opportunities that could provide us with additional product or service offerings or with our areas of focus. We have also experienced turnover in our workforce. These reductionsadditional industry expertise, assets and turnover have resulted in reallocations of duties, whichcapabilities. Acquisitions could result in employee uncertaintydifficulties integrating acquired operations, products, technology, internal controls, personnel and discontent. Reductionsmanagement teams and result in the diversion of capital and management’s attention away from other business issues and opportunities. If we fail to successfully integrate acquisitions, our workforcebusiness could make it difficultbe harmed. Acquisitions could also result in the assumption of known and unknown liabilities, product, regulatory and other compliance issues, dilutive issuances of our equity securities, the incurrence of debt, disputes over earn-outs or other litigation, and adverse effects on relationships with our and our target’s employees, customers and suppliers. Moreover, our acquisitions may not be successful in achieving our desired strategy, product, financial or other objectives or expectations, which would also cause our business to attract, motivatesuffer.

Acquisitions can also lead to large non-cash charges that can have an adverse effect on our results of operations as a result of write-offs for items such as future impairments of intangible assets and retain employees, whichgoodwill, restructuring charges, inventory write downs or the recording of share-based compensation.

If we divest or discontinue product categories or products that we previously acquired, or if the value of those parts of our business become impaired, we may need to evaluate the carrying value of our goodwill. Additional impairment charges could adversely affect our business.
Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations inresults of operations. Several of our operating results.
Our gross margins can vary duepast acquisitions have not been successful and have led to consumer demand, competition, product life cycle, new product introductions, unit volumes, commoditysignificant impairment charges. Acquisitions and supply chain costs, geographic sales mix, currency exchange rates, and the complexity and functionality of new product innovations. In particular, if we are not able to introduce new products in a timely manner at the product cost we expect, or if consumer demand for our products is less than we anticipate, or if there are product pricing, marketing and other initiatives by our competitors to which we need to react or that are initiated by us to drive sales that lower our margins, then our overall gross margin will be less than we project.
In addition, our gross marginsdivestitures may vary significantly by product line, sales geography and customer type, as well as within product lines. When the mix of products sold shifts from higher margin product lines to lower margin product lines, to lower margin sales geographies, or to lower margin products within product lines, our overall gross margins and our profitability may be adversely affected.
As we expand within and into new product categories, our products in those categories may have lower gross margins than in our traditional product categories. Consumer demand in these product categories, based on style, color and other factors, tends to be less predictable and tends to vary more across geographic markets. As a result, we may face higher up-front investments, inventory costs associated with attempting to anticipate consumer preferences, and increased inventory write-offs. If we are unable to offset these potentially lower margins by enhancing the margins in our more traditional product categories, our profitability may be adversely affected.
The impact of these factors on gross margins can create unanticipated fluctuations inalso cause our operating results which may cause volatilityto fluctuate and make it difficult for investors to compare operating results and financial statements between periods. In addition, from time to time we make strategic venture investments in the priceother companies that provide products and services that are complementary to ours. If these investments are unsuccessful, this could have an adverse impact on our results of our shares.operations, operating cash flows and financial condition.

As we continue our efforts to lower our costs and improve our operating leverage,operational efficiency, we may or may not fully realize our goals.
Our turnaround strategy over the past three years has been based in part on simplifying the organization, reducing operating costs through global workforce reductions and a reduction in the complexity of our product portfolio, with the goal of better aligning costs with our current business. We restructured our business in fiscal years 2014 through 2016, and we may continue to divest or discontinue non-strategic product categories. During the third quarter of fiscal year 2016, we divested our Lifesize video conferencing business and completed our exit from the OEM business. In addition, we are continuing the rationalization of our general and administrative expense, infrastructure and indirect procurement to reduce operating expenses.

Our ability to achieve the desired and anticipated cost savings and other benefits from these simplification, cost-cutting and restructuring activities, and within our desired and expected timeframes, are subject to many estimates and assumptions, and the actual savings and timing for those savings may vary materially based on factors such as local labor regulations, negotiations with third parties, and operational requirements. These estimates and assumptions are also subject to significant economic, competitive and other uncertainties, some of which are beyond our control. There can be no assurance that we will fully realize the desired and anticipated benefits from these activities. To the extent that we are unable to improve our financial performance,operational efficiency, further restructuring measures may be required in the future. Furthermore, we are expecting to be able to use the anticipated cost savings from these activities to fund and support our current growth opportunities and incremental investments for future growth. If the cost-savings and other benefits from restructuring activities do not materialize as anticipated, or within our expected timeframes, our ability to invest in growth may be limited and our business and operating results may be adversely affected.

As part of the restructuring plans, we reduced the size ofProduct quality issues could adversely affect our product portfolioreputation, business and the assortment of similar products at similar price points within each product category over the past several fiscal years. While we areoperating results.


constantly replacing products and are dependent on the success of our new products, this product portfolio simplification has made us even more dependent on the success of the newThe products that we are introducing.sell or third-party components included therein could contain defects in design or manufacture. There can be no assurance we will be able to detect and remedy all defects in the hardware and software we sell. Failure to do so could result in product recalls, product liability claims and litigation, product redesign efforts, lost revenue, loss of reputation, and significant warranty and other expenses to remedy.

As
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While we focus on growth opportunities, we are divesting or discontinuing non-strategicmaintain reserves for reasonably estimable liabilities and purchase liability insurance, our reserves may not be adequate to cover such claims and liabilities and our insurance is subject to deductibles and may not be adequate to cover such claims and liabilities. Furthermore, our contracts with distributors and retailers may contain warranty, indemnification and other provisions related to product categoriesquality issues, and pursuing strategic acquisitions and investments, which, if unsuccessful, could have an adverse impact on our business.
We continue to review our product portfolio and update our non-strategic product categories and products. During the third quarter of fiscal year 2016, we divested our Lifesize video conferencing business and completed our exit from the OEM business. If we are unable to effect sales on favorable terms or if realignment is more costly or distracting than we expect or has a negative effect on our organization, employees and retention, thenclaims under those provisions may adversely affect our business and operating results may be adversely affected. Discontinuing products with service components may also cause usresults.

Risks Related to continue to incur expenses to maintain services within the product life cycle or to adversely affect our customer and consumer relationships and brand. In addition, discontinuing product categories, even categories that we consider non-strategic, reduces the size and diversificationGlobal Nature of our businessOperations and causes us to be more dependent on a smaller number of product categories.Regulatory Environment

As we attempt to grow our business in strategic product categoriesAdverse global and emerging market geographies, we will consider growth through acquisition or investment. We will evaluate acquisition opportunities that could provide us with additional product or service offerings or with additional industry expertise, assetsregional economic and capabilities. For example, we recently acquired Jaybird to expand into the wireless audio wearables market. Acquisitions could result in difficulties integrating acquired operations, products, technology, internal controls, personnel and management teams and result in the diversion of capital and management’s attention away from other business issues and opportunities. If we fail to successfully integrate acquisitions, our business could be harmed. Moreover, our acquisitions may not be successful in achieving our desired strategic objectives, which would also cause our business to suffer. Acquisitionsgeopolitical conditions can also lead to large non-cash charges that can have an adverse effect on our results of operations as a result of write-offs for items such as future impairments of intangible assets and goodwill or the recording of stock-based compensation. Several of our past acquisitions have not been successful and have led to impairment charges, including a $122.7 million and $214.5 million non-cash goodwill impairment charge in fiscal years 2015 and 2013, respectively, related to our Lifesize video conferencing business which is reported in discontinued operations. In addition, from time to time we make strategic venture investments in other companies that provide products and services that are complementary to ours. If these investments are unsuccessful, this could have an adverse impact on our results of operations, operating cash flows and financial condition.
We rely on third parties to sell and distribute our products, and we rely on their information to manage our business. Disruption of our relationship with these channel partners, changes in their business practices, their failure to provide timely and accurate information, changes in distribution partners, practices or models or conflicts among our channels of distribution couldmaterially adversely affect our business, results of operations operating cash flows and financial condition.
Our sales channel partners, the distributors and retailers who distribute and sell our products, also sell products offered by our competitors and, in the case of retailer house brands, may also be our competitors. If product competitors offer our sales channel partners more favorable terms, have more products available to meet their needs, or utilize the leverage of broader product lines sold through the channel, or if our retailer channel partners show preference for their own house brands, our sales channel partners may de-emphasize or decline to carry our products. In addition, certain of our sales channel partners could decide to de-emphasize the product categories that we offer in exchange for other product categories that they believe provide them with higher returns. If we are unable to maintain successful relationships with these sales channel partners or to maintain our distribution channels, our business will suffer.
As we expand into new product categories and markets in pursuit of growth, we will have to build relationships with new channel partners and adapt to new distribution and marketing models. These new partners, practices and models may require significant management attention and operational resources and may affect our accounting, including revenue recognition, gross margins, and the ability to make comparisons from period to period. Entrenched and more experienced competitors will make these transitions difficult. If we are unable to build successful distribution channels or successfully market our products in these new product categories, we may not be able to take advantage of the growth opportunities, and our business and our ability to effect a turnaround in our business could be adversely affected.



We reserve for cooperative marketing arrangements, directconduct operations internationally and indirect customer incentive programs and pricing programs with our sales channel partners. These reserves are based on judgments and estimates, using historical experience rates, inventory levels in distribution, current trends and other factors. There could be significant differences between the actual costs of such arrangements and programs and our estimates.
The impact of economic conditions, evolving consumer preferences, and purchasing patterns on our distribution partners, or competition between our sales channels, could result in sales channel disruption. For example, if sales at large retail stores are displaced as a result, of bankruptcy, competition from Internet sales channels or otherwise, our product sales could be adversely affected. Any loss of a major partner or distribution channel or other channel disruption could make us more dependent on alternate channels, increase pricingadverse global and promotional pressures from other partnersregional economic and distribution channels, increase our marketing costs, or adversely impact buying and inventory patterns, payment terms or other contractual terms.
We use retail sell-through data, which represents sales of our products by our direct retailer customers to consumers, and by our distributor customers to their customers, along with other metrics, to assess consumer demand for our products. Sell-through data is subject to limitations due to collection methods and the third-party nature of the data and thus may not be an accurate indicator of actual consumer demand for our products. In addition, the customers supplying sell-through data vary by geographic region and from period to period, but typically represent a majority of our retail sales. In addition, we rely on channel inventory data from our retailer and distributor customers. If we do not receive this information on a timely and accurate basis, or if we do not properly interpret this information, our results of operations and financial condition may be adversely affected.
Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area.
We produce approximately half of our products at facilities we own in China, and we are under progress to increase that percentagegeopolitical conditions have in the near future. The majority of our other production is performed by third-party contract manufacturers, including other design manufacturers, in Chinapast and Malaysia.
Our manufacturing operations in China could be adversely affected by changescan in the interpretation and enforcement of legal standards, strains on China’s available labor pool, changes in labor costs and other employment dynamics, high turnover among Chinese employees, infrastructure issue, import export issue, currency transfer restriction, natural disasters, conflicts or disagreements between China and Taiwan or China and the United States, labor unrest, and other trade customs and practices that are dissimilar to those in the United States and Europe. Interpretation and enforcement of China’s laws and regulations continue to evolve and we expect differences in interpretation and enforcement to continue in the foreseeable future.
Our manufacturing operations at third-party contractors could be adversely affected by contractual disagreements, by labor unrest, by natural disasters, by strains on local communications, trade, and other infrastructures, by competition for the available labor pool or manufacturing capacity, by increasing labor and other costs, and by other trade customs and practices that are dissimilar to those in the United States and Europe.

Further, we may be exposed to fluctuations in the value of the local currency in the countries in which manufacturing occurs. Future appreciation of these local currencies could increase our component and other raw material costs. In addition, our labor costs could continue to rise as wage rates increase and the available labor pool declines. These conditions couldfuture materially adversely affect our financial results.
We purchase key components and products from a limited number of sources, and our business, and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.
We purchase certain products and key components from a limited number of sources. If the supply of these products or key components, such as micro-controllers, and optical sensors, were to be delayed or constrained, or if one or more of our single-source suppliers goes out of business as a result of adverse global economic conditions or natural disasters, we might be unable to find a new supplier on acceptable terms, or at all, and our product shipments to our customers could be delayed, which could adversely affect our business, financial condition and operating results.

Lead times for materials, components and products ordered by us or by our contract manufacturers can vary significantly and depend on factors such as contract terms, demand for a component, and supplier capacity. From time to time, we have experienced component shortages and extended lead times on semiconductors, such as micro-controllers and optical sensors, and base metals used in our products. Shortages or interruptions in the supply of components or subcontracted products, or our inability to procure these components or products from alternate sources at acceptable prices in a timely manner, could delay shipment of our products or increase our production costs, which could adversely affect our business and operating results.
Conflict minerals regulations are causing us to incur additional expenses, could limit the supply and increase the cost of certain metals used in manufacturing our products and could adversely affect the distribution and sales of our products.
As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted disclosure requirements regarding the use of certain minerals, known as conflict minerals, which are mined from the Democratic Republic of Congo and adjoining countries, as well as procedures regarding a manufacturer’s efforts to identify and prevent the sourcing of such minerals and metals produced from those minerals. Additional reporting obligations are being considered by the European Union. The implementation of the existing U.S. requirements and any additional requirements in Europe could affect sourcing at competitive prices and availability in sufficient quantities of certain minerals used in the manufacture of our products. The number of suppliers who provide conflict-free minerals may be limited, and the implementation of these requirements may decrease the number of suppliers capable of supplying our needs for certain metals.  In addition, there may be material costs associated with complying with the disclosure requirements, such as costs related to the due diligence process of determining the source of certain minerals used in our products, as well as costs of possible changes to products, processes, or sources of supply as a consequence of such verification activities. As our supply chain is complex and we use contract manufacturers for some of our products, we may not be able to sufficiently verify the origins of the relevant minerals used in our products through the due diligence procedures that we implement, which may adversely affect our reputation. We may also encounter challenges to satisfy those customers who require that all of the components of our products be certified as conflict-free, which could, if we are unable to satisfy their requirements or pass through any increased costs associated with meeting their requirements place us at a competitive disadvantage, adversely affect our business and operating results, or both. We filed our report for the calendar year 2014 with the SEC on May 29, 2015.
If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales.
Our business requires us to coordinate the manufacture and distribution of our products over much of the world. We rely on third parties to manufacture many of our products, manage centralized distribution centers, and transport our products. If we do not successfully coordinate the timely manufacturing and distribution of our products, we may have insufficient supply of products to meet customer demand, we could lose sales, we may experience a build-up in inventory, or we may incur additional costs.
By locating our manufacturing in China and Southeast Asia, we are reliant on third parties to get our products to distributors around the world. Transportation costs, fuel costs, labor unrest, natural disasters and other adverse effects on our ability, timing and cost of delivering products can increase our inventory, decrease our margins, adversely affect our relationships with distributors and other customers and otherwise adversely affect our results of operations and financial condition.


A significant portion of our quarterly retail ordersSuch conditions, including but not limited to inflation, slower growth or recession, new or increased tariffs, trade restrictions, changes to fiscal and product deliveries generally occur in the last weeks of the fiscal quarter. This places pressure on our supply chainmonetary policy, higher interest rates and currency fluctuations, and other conditions that are susceptible to impact consumer confidence and spending could adversely affect demand for our products. In fiscal year 2023, we were impacted by adverse macroeconomic and geopolitical conditions including but not limited to inflation, foreign currency fluctuations, and slowdown of economic activity around the world, in part due to changes in interest rates, and lower consumer and enterprise spending. In addition, the war in Ukraine increased global supply chain, logistics, and inflationary challenges. In the fourth quarter of fiscal year 2022, we indefinitely ceased all sales and shipments to Russia. Our sales in Ukraine have also been halted due to the ongoing military operations on the Ukrainian territory. We had no revenues from Russia and profitability if we are unableUkraine in fiscal year 2023.

Global or regional economic and political conditions also have an impact on our suppliers, contract manufacturers, logistics providers, and distributors, causing volatility in cost of materials and shipping and transportation rates, and as a result impacting the pricing of our products. Price increases may not successfully offset cost increases or may cause us to successfully fulfill customer orderslose market share and in the quarter.turn adversely impact our operations.



All these and other global and regional economic and geopolitical factors can materially adversely affect our business, results of operations and financial condition. 

We conduct operations in a number of countries and have invested significantly in growing our sales and marketing activities in China, and the effect of business, legal and political risks associated with international operations could adversely affect us.
 
We conduct operations in a number of countries and have invested significantly in growing our personnel and sales and marketing activities in China and, to a lesser extent, other emerging markets. We may also increase our investments to grow sales in other emerging markets, such as Latin America, Eastern Europe, the Middle East and Eastern Europe.Africa. There are risks inherent in doing business in international markets, including:
 
•Difficulties in staffing and managing international operations;
 
•Compliance with increasing amounts of laws and regulations, including environmental, tax, import/export and anti-corruption laws, which vary from country to country, and the European Union legislation, and over time, increasing the costs of compliance and potential risks of non-compliance;
 
•Varying laws, regulations and other legal protections, uncertain and varying enforcement of those laws and regulations, dependence on local authorities, and the importance of local networks and relationships;

•Varying accounting, auditing and financial reporting standards, accountability and protections, including risks related to the lack of access by the Public Company Accounting Oversight Board (United States) ("PCAOB") to inspect PCAOB-registered accounting firms in emerging market countries such as China;
 
•Exposure to political, economic and financial instability, especially withincluding due to the uncertainty associated with the ongoing sovereign debt crisisissues in certain Euro zone countries, which may lead to reduced sales, currency exchange losses and collection difficulties or other losses;

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•Import or export restrictions or licensing requirements that could affect some of our products, including those with encryption technology;

•Trade protection measures, custom duties, tariffs, import or export duties, and other trade barriers, restrictions and regulations, including recent and ongoing United States - China tariffs and trade restrictions, including China's 2021 Anti-Foreign Sanctions Law;
 
•Lack of infrastructure or services necessary or appropriate to support our products and services;

•Effects of the COVID-19 pandemic that may be more concentrated where we operate internationally;
 
•Exposure to fluctuations in the value of local currencies;
 
•Difficulties and increased costs in establishing sales and distribution channels in unfamiliar markets, with their own market characteristics and competition, including entrenched local competition;
 
•Weak protection of our intellectual property rights;
 
•Higher credit risks;
 
•ChangesVariations in VAT (value-added tax) or VAT reimbursement;
 
•Imposition of currency exchange controls;
 
Import or export restrictions that could affect some of our products, including those with encryption technology;
•Delays from customs brokers or government agencies; and
 
•A broad range of customs, consumer trends, and more.
 
Any of these risks could adversely affect our business, financial condition and operating results.
 
Sales growth in key markets, including China, is an important part of our expectations for our business. As a result, if Chinese economic, political or business conditions deteriorate in these markets, or if one or more of the risks described above materializesmaterialize in China,these markets, our overall business and results of operations will be adversely affected.
 
Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs and the resulting consequences, may have adverse impacts on our business, results of operations and financial condition.

In recent years, the U.S. government has instituted or proposed changes to international trade policy through the renegotiation, and potential termination, of certain existing bilateral or multilateral trade agreements and treaties with, and the imposition of tariffs on a wide range of products and other goods from, China, countries in EMEA and other countries. As previously disclosed, we have invested significantly in manufacturing facilities in China and Southeast Asia. Given our manufacturing principally in those countries, and our lack of manufacturing elsewhere, policy or regulations changes in the United States or other countries present particular risks for us. We are constantly evaluating our manufacturing footprint globally including beyond Asia.

In addition, the current Chinese administration has imposed an increased volume of regulation creating a more challenging environment for non-Chinese companies operating in the region, including in the areas of intellectual property, trade, contract enforcement, data privacy, capital markets and human rights. As a result, such regulations may have the effect of limiting our growth and market share in China, and disrupting manufacturing and operations in the region.

For example, on June 10, 2021, the National People’s Congress Standing Committee of the People’s Republic of China passed China's new Anti-Foreign Sanctions Law. The Anti-Foreign Sanctions Law took immediate effect and allows China to take “retaliatory action” against any “discriminatorily restrictive measures” imposed by foreign countries against Chinese organizations and citizens. As a result, China may impose countermeasures against government and private entities and/or persons that formulate, implement or comply with any regulation deemed a
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“discriminatorily restrictive measure.” Penalties may include denial of entry to China, prohibition of doing business in or with China, freezing of assets and “any other necessary measures.”

New or increased tariffs could adversely affect more or all of our products. There also are risks associated with retaliatory tariffs and resulting trade wars. We cannot predict future trade policy and regulations in the United States and other countries, the terms of any renegotiated trade agreements or treaties, or tariffs and their impact on our business. A trade war could have a significant adverse effect on world trade and the world economy. To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or components or materials used in our products imported into the United States or other countries, or create adverse tax consequences, the sales, cost or gross margin of our products may be adversely affected and the demand from our customers for products and services may be diminished. Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending. If we deem it necessary to alter all or a portion of our activities or operations in response to such policies, agreements or tariffs, our capital and operating costs may increase.

In addition, as a result of Russia’s invasion of Ukraine in February 2022, sanctions and trade restrictions have been imposed on Russia, including banks, businesses, and individuals, by the U.S., the European Union and Switzerland. This conflict has driven and could continue to drive economic uncertainty, including inflation, and component availability, among other things.

Our ongoing efforts to address these risks may not be effective and may have long-term adverse effects on our operations and operating results that we may not be able to reverse. Such efforts may also take time to implement or to have an effect and may result in adverse quarterly financial results or fluctuations in our quarterly financial results. As a result, changes in trade policy and regulations in the United States and other countries as well as changes in trade agreements and tariffs and sanctions imposed on Russia could adversely affect our business, results of operations and financial condition.

Our financial performance is subject to risks associated with fluctuations in currency exchange rates.
 
A significant portion of our business is conducted in currencies other than the U.S. Dollars.Dollar. Therefore, we face exposure to movements in currency exchange rates.


Our primary exposure to movements in currency exchange rates relates to non-U.S. Dollar denominatedDollar-denominated sales and operating expenses worldwide. For fiscal year 2016,2023, approximately 48% 51% of our revenue was in non-U.S. denominated currencies. WeakeningThe weakening of currencies relative to the U.S. Dollar adversely affects the U.S. Dollar value of our non-U.S. Dollar-denominated sales and earnings. If we raise international pricing to compensate, it could

potentially reduce demand for our products, adversely affecting our sales and potentially having an adverse impact on our market share. Margins on sales of our products in non-U.S. Dollar denominatedDollar-denominated countries and on sales of products that include components obtained from suppliers in non-U.S. Dollar denominatedDollar-denominated countries could be adversely affected by currency exchange rate fluctuations. In some circumstances, for competitive or other reasons, we may decide not to raise local prices to fully offset the U.S. Dollar’s strengthening, which would adversely affect the U.S. Dollar value of our non-U.S. Dollar-denominated sales and earnings. Competitive conditions in the markets in which we operate may also limit our ability to increase prices in the event of fluctuations in currency exchange rates. Conversely, strengthening of currency rates may also increase our product component costs and other expenses denominated in those currencies, adversely affecting operating results. We further note that a larger portion of our sales than of our expenses are denominated in non-U.S. denominated currencies.
 
We use derivative instruments to hedge certain exposures to fluctuations in currency exchange rates. The use of such hedging activities may not offset any, or more than a portion, of the adverse financial effects of unfavorable movements in currency exchange rates over the limited time the hedges are in place and do not protect us from long term shifts in currency exchange rates.


As a result, fluctuations in currency exchange rates could affect and have in the past adversely affectaffected our business, operating results and financial condition. Moreover, these exposures may change over time.


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We are subject to risks related to our environmental, social and governance ("ESG") activities and disclosures.

Concerns over climate change have resulted and may in the future result in new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation and other cost increases that could adversely affect our business. Compliance with such requirements will also require additional expenditures by us or our suppliers, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

In addition, ESG reporting and disclosure requirements continue to evolve, with increasing global regulation and heightened investor expectations. Companies must develop an expanded set of metrics and measures, data collection and processing, controls, and reporting processes in order to meet regulatory requirements and stakeholder expectations. Failure to promptly and accurately meet these expectations and requirements may result in reputational and brand damage, regulatory penalties and litigation among other things.

As a company operating in many markets and jurisdictions, and expanding into new growth categories, and engaging in acquisitions, and as a Swiss, dual - listeddual-listed company, we are subject to risks associated with new, existing and potential future laws and regulations.

Based on our current business model and asAs we expand into new markets and product categories and acquire companies, businesses and assets, we must comply with a wide variety of laws, standards and other requirements governing, among other things, health and safety, hazardous materials usage, product-related energy consumption, conflict minerals, packaging, recycling, sustainability, environmental, child labor and environmentalhuman rights matters. Our products may be required to obtain regulatory approvals and satisfy other regulatory concerns in the various jurisdictions where they are manufactured, sold or both. Companies, businesses and assets that we acquire may not be in compliance with regulations in all jurisdictions. These requirements create procurement and design challenges, which, among other things, require us to incur additional costs identifying suppliers and contract manufacturers who can provide or obtain compliant materials, parts and end products. Failure to comply with such requirements can subject us to liability, additional costs, and reputational harm and, in severe cases, force us to recall products or prevent us from selling our products in certain jurisdictions. We also are subject to the SEC disclosure requirements regarding the use of certain minerals, known as conflict minerals, which are mined from the Democratic Republic of Congo and adjoining countries, as well as procedures regarding a manufacturer’s efforts to identify and prevent the sourcing of such minerals and metals produced from those minerals. The moral and regulatory imperatives to avoid purchasing conflict minerals are causing us to incur additional expenses, could limit the supply and increase the cost of certain metals used in manufacturing our products and could adversely affect the distribution and sales of our products.
 
As a Swiss company with shares listed on both the SIX Swiss Exchange and the Nasdaq Global Select Market, we are also subject to both Swiss and United States corporate governance and securities laws and regulations. In addition to the extra costs and regulatory burdens of our dual regulatory obligations, the two regulatory regimes may not always be compatible and may impose disclosure obligations, or operating restrictions or tax effects on our business to which our competitors and other companies are not subject. For example, on January 1, 2014,2023, subject to certain transitional provisions, the revised Swiss Corporate Law incorporating the Swiss Federal Council Ordinance Against Excessive Compensation at Public Companies, (the “Ordinance”) became effective in connection with the Minder initiative approved byeffective. The revised Swiss voters during 2013.  The Ordinance,Corporate Law among other things, (a) requires a binding shareholder “say on pay” vote with respect to the compensation of members of our executive management and Board of Directors, (b) generally prohibits the making of severance, advance, transaction premiums and similar payments to members of our executive management and Board of Directors, (c) imposes other restrictive compensation practices, and (d) requires that our articles of incorporation specify various compensation-related matters. In addition, during 2013, Swiss voters considered an initiative to limit pay for a chief executive officer to a multiple of no more than twelve times the salary of the lowest-paid employee. Although voters rejected that initiative, it did receive substantial voter support. The Ordinance, potentialPotential future initiatives relating to corporate governance or executive compensation, and Swiss voter sentiment in favor of such regulations may increase our non-operating costs and adversely affect our ability to attract and retain executive management and members of our Board of Directors.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") which are subject to interpretation or changes by the Financial Accounting Standard Board ("FASB"), the SEC and other various bodies formed to promulgate and interpret appropriate accounting principles. New accounting pronouncements and changes in accounting principles have occurred in the past and are expected to occur in the future which may have a significant effect on our financial results or our compliance with regulations.

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As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase, in the future, which could adversely affect our net income and cash flows.

As a result of the Federal Act on the Tax Reform and AHV Financing (“TRAF”), the canton of Vaud in Switzerland, where we are incorporated, enacted tax reforms on March 10, 2020 that took effect as of January 1, 2020. As a result of the reform, Logitech will incur cash income taxes that will increase over time as the deferred income tax benefit established in connection with the reform diminishes. The canton’s tax authority is primarily delegated by the Swiss federal government and its implementation of TRAF in general or with respect to Logitech is subject to Swiss federal review and challenge. Implementation of any material change in tax laws or policies or the adoption of new interpretations of existing tax laws and rulings, or termination or replacement of our tax arrangements with the canton of Vaud, by Switzerland or the canton of Vaud could result in a higher effective income tax rate, or a decreased tax asset, a charge to earnings and an accelerated pace of increase in our effective income tax rate, or a combination of such impacts, on our worldwide earnings and any such change will adversely affect our net income. Changes in our effective income tax rate may also make it more difficult to compare our net income and earnings per share between periods.

We operate in multiple jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. Our effective income tax rate may be affected by changes in or interpretations of tax laws, treaties, rulings, regulations

or agreements in any given jurisdiction, or changes in international tax reform by the Organization for Economic Co-operation and Development and similar organizations, utilization of net operating loss and tax credit carryforwards, changes in geographical allocation of income and expense, and changes in management’s assessment of matters such as the realizability of deferred tax assets. In the past, we have experienced fluctuations in our effective income tax rate. Our effective income tax rate in a given fiscal year reflects a variety of factors that may not be present in the succeeding fiscal year or years. There is no assurance that our effective income tax rate will not change in future periods.
We are incorporated in the Canton of Vaud in Switzerland and our effective income tax rate benefits from a longstanding ruling from the Canton of Vaud. The tax rules in Switzerland are expected to change in response to certain guidance and demands from both the European Union and the Organization for Economic Co-operation and Development and that could have an adverse effect on our tax ruling and effective income tax rate. Switzerland’s implementation of any material change in tax laws or policies or its adoption of new interpretations of existing tax laws and rulings, or changes in our tax ruling from the Canton of Vaud, could result in a higher effective income tax rate on our worldwide earnings and such change could adversely affect our net income.

We file Swiss and foreign tax returns. We are frequently subject to tax audits, examinations and assessments in various jurisdictions. If any tax authority successfully challenges our operational structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective income tax rate could increase. For example, policy changes in Switzerland, the United States or China predicated on our presence in those countries could adversely affect where we recognize profit and our effective income tax rate. A material assessment by a governing tax authority could adversely affect our profitability. If our effective income tax rate increases in future periods, our net income and cash flows could be adversely affected.

We maintain cash and cash equivalents at financial institutions and are exposed to credit risk in the event of default by such financial institutions.

We maintain cash and cash equivalents with various creditworthy financial institutions and while we have a policy to limit exposure with any one financial institution, we are exposed to credit risk in the event of default by financial institutions to the extent that cash balances with individual financial institutions are in excess of amounts that are insured. If such institutions were to fail, we could lose all or a portion of amounts held in excess of such insurance limits. Any material loss that we may experience in the future as a result could additionally have an adverse effect on our ability to pay or could delay payments of our operational expenses and other payments, including in connection with our dividend, share repurchases, payments to our vendors and employees and cause other operational impacts.

Risks Related to Confidential Information, Cybersecurity, Privacy, and Intellectual Property
Losses or unauthorized access to or releases of confidential information could adversely affect our business and result in significant reputational, financial and legal consequences.

We use and store confidential information, including but not limited to our business, financial, legal and governance information, as well as personal information about our employees, members of our Board of Directors and customers. In addition, as a consumer electronics company, our websites are an important presentation of our company, identity and brands and an important means of interaction with and source of information for consumers
Logitech International S.A. | Fiscal 2023 Form 10-K | 27

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of our products. We also rely on our centralized information technology systems for product-related information and to store intellectual property and data, forecast our business, maintain financial records, manage operations and inventory, and operate other critical functions. We allocate significant resources to maintain our information technology systems and deploy network security, data encryption, training and other measures to protect against unauthorized access or misuse.

Nevertheless, our websites and information technology systems have been and could continue to be subject to or threatened with, and are susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, structural or operational failures, computer viruses, ransomware and other malware, attacks by computer hackers and other third parties, employee error or malfeasance, phishing and other means of social engineering, other data security issues, telecommunication failures, user error, employee or contractor negligence or malfeasance, catastrophes, downtime due to system or software upgrades, integration or migration, or other foreseeable and unforeseen events. Such risks extend not only to our own products, services, systems and networks, but also to those of customers, suppliers, contractors, business partners, vendors, and other third parties, particularly as all parties increasingly digitize their operations. To date, we are not aware of any such disruptions or issues impacting our systems or products having resulted in security incidents with a material impact on us, individually or in the aggregate.

Moreover, there is an increased risk that we may experience security breaches or incidents as a result of our employees, service providers and third parties working remotely. In addition, our growth and increased frequency and sophistication of cyber and product security attacks may increase the likelihood of our becoming a target of complex and damaging attacks that substantially disrupt operations and expose sensitive data.

While we have developed and implemented security measures and processes designed to protect against cyber and other security threats, such measures cannot provide absolute security and may not be successful in preventing future security breaches. Moreover, we may need to implement additional protective measures to reduce the risk of potential security breaches and security incidents, which could cause us to incur significant additional expenses.

Security incidents or breaches impacting the information we or our third-party service providers process or maintain, or our products, websites or information technology systems may result in loss, unavailability, corruption, or unauthorized collection, use, disclosure or other processing of personal data and other confidential information that we and our service providers maintain and otherwise process. Any such incidents or breaches, or the belief or perception that any such matters have occurred could result in disruptions of our operations, loss of intellectual property and loss, corruption, unavailability or other unauthorized processing of data. Any such event could also damage our brand and reputation or otherwise harm our business, and could result in government enforcement actions, litigation and potential liability for us. Any of these may adversely affect our business, results of operations and financial condition, potentially in a material manner.

In addition, while we carry cyber insurance, we cannot be certain that our insurance will be sufficient to cover losses and liabilities resulting from cyberattacks, security breaches and incidents, or other interruptions, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim, any of which could have a material adverse effect on our business, including our financial condition, results of operations and reputation.

The collection, storage, transmission, use and distribution of personal data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.

In connection with our operations, we collect and otherwise process personal data, including that of our consumers. The processing of this information is increasingly subject to legislation, regulations and enforcement in numerous jurisdictions around the world. Global data privacy regulation is increasingly fragmented, with increasing enforcement efforts and penalties. Such fragmentation requires more complex and costly compliance structures, while heightened enforcement increases the cost and reputational risk associated with even minor compliance errors. For example, the General Data Protection Regulation ("GDPR"), which is applicable to us and to all companies processing data of people in the European Union, imposes significant fines and sanctions for violation of the Regulation. Compliance with the GDPR's international transfer rules has been made more difficult by the invalidation of the European Union-U.S. Privacy Shield and we are now required to put in place additional privacy
Logitech International S.A. | Fiscal 2023 Form 10-K | 28

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protective measures for transfer of data of people in the European Union to certain countries outside of the European Economic Area. In the United States, several states have adopted broad privacy laws. Such laws and regulations are typically intended to protect the privacy and security of personal information and its collection, storage, transmission, use, disclosure and other processing. For example, California has enacted the California Consumer Privacy Act (the “CCPA”), which, among other things, requires covered companies to provide disclosures to California consumers and afford such consumers abilities to opt-out of certain sales of personal information. Additionally, the California Privacy Rights Act (the “CPRA”), was approved by California voters in November 2020. The CPRA significantly modifies the CCPA and has made compliance more uncertain and complex. Additionally, other U.S. states continue to propose, and in certain cases adopt, privacy-focused legislation. Other laws and regulations may follow, at state and federal levels.

In addition, because various jurisdictions have different laws and regulations concerning the use, storage, transmission and other processing of such information, we may face requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter. The collection and processing of personal data also heightens the risk of security breaches and other data security issues related to our IT systems and the systems of third-party data storage and other service and IT providers. Such laws and regulations, variation between jurisdictions and risks presented by our processing of personal data could limit our ability to use data and develop new features and services, subject us to increased costs, require allocation of additional resources and changes to our policies and practices, which may be difficult to achieve in a commercially reasonable manner or at all. Any actual or perceived failure by us to comply with these laws, regulations, or other actual or asserted obligations relating to privacy or the collection, use or other processing of personal data may lead to significant fines, penalties, regulatory investigations, lawsuits, significant costs for remediation, damage to our reputation, or other liabilities, all of which could adversely affect our business.

Claims by others that we infringe their proprietary technology could adversely affect our business.
 
We have been expanding the categories of products we sell, such as entering new markets and introducing products for tablets, other mobile devices, digital music, and video collaboration.sell. We expect to continue to enter new categories and markets. As we do so, we face an increased risk that claims alleging we infringe the patent or other intellectual property rights of others, regardless of the merit of the claims, may increase in number and significance. Infringement claims against us may also increase as the functionality of video, voice, data and conferencing products begin to overlap. This risk is heightened by the increase inpersistent lawsuits brought by holders of patents that do not have an operating business or are attempting to license broad patent portfolios and by the increasing attempts by companies in the technology industries to enjoin their competitors from selling products that they claim infringe their intellectual property rights. Intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, and we cannot be certain that we will be successful in defending ourselves against intellectual property claims. A successful claimant could secure a judgment that requires us to pay substantial damages or prevents us from distributing certain products or performing certain services. We might also be required to seek a license for the use of such intellectual property, which may not be available on commercially acceptable terms or at all. Alternatively, we may be required to develop non-infringing technology, which could require significant effort and expense and may ultimately not be successful. Any claims or proceedings against us, whether meritorious or not, could be time consuming, result in costly litigation or the diversion of significant operational resources, or require us to enter into royalty or licensing agreements, any of which could materially and adversely affect our business and results of operations.


We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the development of products that compete with our products.
 
Our future success depends in part on our proprietary technology, technical know-how and other intellectual property. We rely on a combination of patent, trade secret, copyright, trademark and other intellectual property laws, and confidentiality procedures and contractual provisions such as nondisclosure terms and licenses, to protect our intellectual property.
 
We hold various United States patents and pending applications, together with corresponding patents and pending applications from other countries. It is possible that any patent owned by us will be invalidated, deemed unenforceable, circumvented or challenged, that the patent rights granted will not provide competitive advantages to us, or that any of our pending or future patent applications will not be granted.granted, maintained or enforced. In addition, other intellectual property laws or our confidentiality procedures and contractual provisions may not adequately protect our intellectual property. Also, others may independently develop similar technology, duplicate our products, or design around our patents or other intellectual property rights. Unauthorized parties have copied and may in the future

attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Any of these events could adversely affect our business, financial condition and operating results.
Logitech International S.A. | Fiscal 2023 Form 10-K | 29

Product quality issuesTable of Contents

Risks Related to our Financial Results

Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares.

Our revenues and profitability are difficult to predict due to the nature of the markets in which we compete, fluctuating user demand, the uncertainty of current and future global economic conditions, and for many other reasons, including the following:

•Our operating results are highly dependent on the volume and timing of orders received during the quarter, which are difficult to forecast. Customers generally order on an as-needed basis and we typically do not obtain firm, long-term purchase commitments from our customers. As a result, our revenues in any quarter depend primarily on orders booked and shipped in that quarter.

•A significant portion of our quarterly retail sales typically occurs in the last weeks of each quarter, further increasing the difficulty in predicting quarterly revenues and profitability.

•Our sales are impacted by consumer demand and current and future global economic and political conditions, including inflation, foreign currency fluctuations, slowdown of economic activity around the world, in part due to rising interest rates, and lower consumer and enterprise spending, trade restrictions and tariffs, and can, therefore, fluctuate abruptly and significantly during periods of uncertain economic conditions or geographic distress, as well as from shifts in distributor inventory practices and consumer buying patterns.

•We must incur a large portion of our costs in advance of sales orders because we must plan research and production, order components, buy tooling equipment, and enter into development, sales and marketing, and other operating commitments prior to obtaining firm commitments from our customers. This makes it difficult for us to rapidly adjust our costs during the quarter in response to a revenue shortfall, which could adversely affect our reputationoperating results.

•From time to time, we engage in opportunistic marketing and sales activities, including advertising and promotional events to enhance our brand awareness. The effectiveness of our marketing and sales efforts is uncertain and it is difficult to predict whether our marketing and sales efforts will result in increased sales.

•The COVID-19 pandemic has led to evolving changes in our supply, operations, logistics and related expenses and use patterns and demand for certain of our products that may not recur or be sustainable in future periods.

•We engage in acquisitions and divestitures, and such activity varies from period to period. Such variance may affect our growth, our previous outlook and expectations, and comparisons of our operating results and financial statements between periods.

•We are continuously attempting to simplify our organization, to control operating costs through expense and global workforce management, to reduce the complexity of our product portfolio, and to better align costs with our current business. We may not achieve the cost savings or other anticipated benefits from these efforts, and the success or failure of such efforts may cause our operating results to fluctuate and to be difficult to predict.

•Fluctuations in currency exchange rates can impact our revenues, expenses and profitability because we report our financial statements in U.S. Dollars, whereas a significant portion of our revenues and expenses are in other currencies. We attempt to adjust product prices over time to offset the impact of currency movements. However, over short periods of time, during periods of weakness in consumer spending or given high levels of competition in many product categories, our ability to change local currency prices to offset the impact of currency fluctuations is limited.

Because our operating results are difficult to predict, our results may be below the expectations of financial analysts and investors, which could impactcause the price of our shares to decline.

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Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.


The marketOur gross margins can vary due to consumer demand, competition, product pricing, product lifecycle, product mix, new product introductions, unit volumes, acquisitions and divestitures, commodity, supply chain and logistics costs, capacity utilization, geographic sales mix, currency exchange rates, trade policy and tariffs, and the complexity and functionality of new product innovations and other factors. In particular, if we are not able to introduce new products in a timely manner at the product cost we expect, or if consumer demand for our products is characterizedless than we anticipate, or if there are product pricing, marketing and other initiatives by rapidly changing technologyour competitors to which we need to react or that are initiated by us to drive sales that lower our margins, then our overall gross margin will be less than we project.

In addition, our gross margins may vary significantly by product line, sales geography and evolving industry standards. To remain competitive,customer type, as well as within product lines. When the mix of products sold shifts from higher margin product lines to lower margin product lines, to lower margin sales geographies, or to lower margin products within product lines, our overall gross margins and our profitability may be adversely affected.

As we must continually introduceexpand within and into new product categories, our products in those categories may have lower gross margins than in our traditional product categories. Consumer demand in these product categories, based on style, color and technologies. other factors, tends to be less predictable and tends to vary more across geographic markets. As a result, we may face higher up-front investments, inventory costs associated with attempting to anticipate consumer preferences, and increased inventory write-offs. If we are unable to offset these potentially lower margins by enhancing the margins in our more traditional product categories, our profitability may be adversely affected.

Changes in trade policy, including tariffs and the tariffs focused on China in particular, and currency exchange rates also have adverse impacts on our gross margins.

The productsimpact of these factors on gross margins can create unanticipated fluctuations in our operating results, which may cause volatility in the price of our shares.

We cannot ensure that our share repurchase programs will be fully utilized or that it will enhance long-term shareholder value. Share repurchases may also increase the volatility of the trading price of our shares. We similarly cannot ensure that we sell could contain defectswill continue to increase our dividend payments or to pay dividends at all. Share repurchases and dividends diminish our cash reserves.

In July 2022, our Board of Directors approved a $500 million increase to our current 2020 repurchase program of our registered shares up to $1.5 billion. The Swiss Takeover Board approved this increase and it became effective on August 19, 2022. As of March 31, 2023, $505.8 million was available for repurchase under the 2020 repurchase program. We have also paid cash dividends and increased the size of our dividend, each year since fiscal year 2013. Our share repurchase programs and dividend policy may be affected by many factors, including general business and economic conditions, our financial condition and operating results, our views on potential future capital requirements, restrictions imposed in designany future debt agreements, the emergence of alternative investment or manufacture. Defectsacquisition opportunities, changes in our business strategy, legal requirements, changes in tax laws, and other factors. Our share repurchase programs do not obligate us to repurchase all or any of the dollar value of shares authorized for repurchase. The programs could also occurincrease the volatility of the trading price of our shares. Similarly, we are not obligated to pay dividends on our registered shares. Under Swiss law, we may only pay dividends upon the approval of a majority of our shareholders, which is under the discretion of and generally follows a recommendation by our Board of Directors that such a dividend is in the products or components that are supplied to us.best interests of our shareholders. There can be no assurance that our Board of Directors will continue to recommend, or that our shareholders will approve, dividend increases or any dividend at all. If we will be able to detect and remedy all defects indo not pay a regular dividend, we may lose the hardware and software we sell. Failure to do sointerest of investors that focus their investments on dividend-paying companies, which could create downward pressure on our share price. Any announcement of termination or suspension of our share repurchase programs or dividend may result in product recalls, product redesign efforts, lost revenue, lossa decrease in our share price. The share repurchase programs and payment of reputation, and significant warranty and other expenses to remedy.

Significant disruptions in, or breaches in security of,cash dividends could also diminish our websites or information technology systems could adversely affect our business.

As a consumer electronics company, our websites are an important presentation of our company, identity and brands and an important means of interaction with and source of informationcash reserves that may be needed for consumers of our products. We also rely on our centralized information technology systems for product-related information and to store intellectual property, forecast our business, maintain financial records, manage operations and inventory, and operate other critical functions. We allocate significant resources to maintain our information technology systems and deploy network security, data encryption and other measures to protect against unauthorized access or misuse. Nevertheless, our websites and information technology systems are susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user error, malfeasance, catastrophes, system or software upgrades, integration or migration, or other foreseeable and unforeseen events. Breaches or disruptions of our websites or information technology systems could adversely affect our brands, reputation or consumer or investor perception of our company, business or products or result in disruptions of our operations, loss of intellectual property or, our customers’ or our business partners’ data, reduced value of our investments in our brands, design, research and developmentbusiness, acquisitions or engineering, or costs to address regulatory inquiries or actions or private litigation or to rebuild or restore our websites or information technology systems.

The collection, storage, transmission, use and distribution of user data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of security breaches.
In connection with certainother purposes. Without dividends, the trading price of our products, we collect data relatedshares must appreciate for investors to our consumers. This information is increasingly subject to legislation and regulations in numerous jurisdictions around the world, and especially in Europe. Government actions are typically intended to protect the privacy and securityrealize a gain on their investment.
Logitech International S.A. | Fiscal 2023 Form 10-K | 31

Table of personal information and its collection, storage, transmission, use and distribution in or from the governing jurisdiction. In addition, because various jurisdictions have different laws and regulations concerning the use, storage and transmission of such information, we may face requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter. The collection of user data heightens the risk of security breaches related to our IT systems and the systems of third-party data storage and other service and IT providers. Such laws and regulations, and the variation between jurisdictions, as well as additional security measures and risk, could subject us to costs, liabilities or negative publicity that could adversely affect our business.Contents
We recently upgraded our worldwide business application suite, and difficulties, distraction or disruptions may interrupt our normal operations and adversely affect our business and operating results.
During fiscal years 2014 and 2015, we devoted significant resources to the upgrade of our worldwide business application suite to Oracle’s version R12. We implemented that upgrade in fiscal year 2016 and will continue to review the success of that implementation during fiscal year 2017. As a result of our transition to the new business application suite, we may experience difficulties with our systems, management distraction, lack of visibility into our business operations and results, and significant business disruptions. Difficulties with our systems may interrupt our normal operations, including our enterprise resource planning, forecasting, demand planning, supply planning, intercompany processes, promotion management, internal financial controls, pricing, and our ability to provide quotes, process orders, ship products, provide services and support to our customers and consumers, bill and track our customers, fulfill contractual obligations, and otherwise run and track our business. For example, the transition has resulted in delays in processing customer claims for claims accruals. In addition, we may need to expend

significant attention, time and resources to correct problems or find alternative sources for performing these functions. Any such difficulty or disruption may adversely affect our business and operating results.
Goodwill impairment charges could have an adverse effect on the results of our operations.
Goodwill associated with a number of previous acquisitions could result in impairment charges. The slowdown in the overall video conferencing industry together with the competitive environment in fiscal year 2013 resulted in a $214.5 million non-cash goodwill impairment charge in fiscal year 2013, which substantially impacted results of discontinued operations. We recorded an additional impairment charge of goodwill of $122.7 million related to our Lifesize video conferencing discontinued operations in fiscal year 2015, reducing its goodwill to zero, which substantially impacted results of discontinued operations again. If we divest or discontinue product categories or products that we previously acquired, or if the value of those parts of our business become impaired, we may need to evaluate the carrying value of our goodwill. Additional impairment charges could adversely affect our results of operations.
ITEM 1B.    UNRESOLVED STAFF COMMENTS
None.

ITEM 2.    PROPERTIES
The table below representsOur headquarters is located in Lausanne, Switzerland, where we occupy approximately 50,500 square feet under a lease that expires in July 2025. Our principal corporate and administrative offices, which includes our principalheadquarters in Lausanne, Switzerland, and future corporate offices in San Jose, California (in the process of being relocated from our current corporate offices in Newark, California) and corporate offices in Hsinchu, Taiwan, together make up approximately 250,000 square feet of leased space. Both our Lausanne, Switzerland headquarters and San Jose, California future location are designed to serve our research and development, product marketing, sales management, technical support and administrative functions. Our Hsinchu, Taiwan location serves our mechanical engineering, process engineering, manufacturing support, quality assurance, design, research and development, and administrative functions. We maintain marketing and channel support offices in approximately 80 locations their approximate square footage and their purposes asover 40 countries, with lease expiration dates from 2023 to 2033.
As of March 31, 2016:
Location Purpose 
Approximate
Square
Footage
 Ownership  
Americas:    
    
Newark, California Silicon valley campus, research and development, product marketing, sales management, technical support and administration 127,000
 Leased  
Camas, Washington Ultimate Ears Group 44,700
 Leased  
Irvine, California Ultimate Ears Group 13,400
 Leased  
Olive Branch, Mississippi Distribution center 397,000
 Contracted (1)
Mexico City, Mexico Distribution center 12,800
 Contracted (1)
Montevideo, Uruguay Distribution center 25,800
 Contracted (1)
Louveira, Brazil Distribution center 10,312
 Contracted (1)
EMEA:    
    
Lausanne, Switzerland EPFL campus, research and development, product marketing, sales management, technical support and administration 46,700
 Leased  
Cork, Ireland Finance, administration, research and development and design 18,400
 Leased  
Nijmegen, Netherlands Finance, administration and distribution center support 15,000
 Leased  
Oostrum, Netherlands Distribution center 155,600
 Contracted (1)
Asia Pacific:    
    
Suzhou, China High-volume manufacturing and employee dormitory 689,300
 Owned  
Suzhou, China High-volume manufacturing 14,300
 Leased  
Hsinchu, Taiwan Mechanical engineering, new product launches, process engineering, commodities management, logistics, quality assurance and administration 116,400
 Leased  
Hong Kong, China Sales and marketing, research and development, administration and distribution center support 15,300
 Leased  
Shanghai, China Sales and marketing, finance 16,900
 Leased  
Chennai, India Digital Home Group engineering and quality assurance 19,200
 Leased  
Tokyo, Japan Sales and marketing 10,100
 Leased  
Hong Kong, China Distribution center 40,000
 Contracted (1)
Singapore, Singapore Distribution center 60,000
 Contracted (1)
Tokyo, Japan Distribution center 27,000
 Contracted (1)
Shenzhen, China Distribution center 32,000
 Contracted (1)
Dayuan Township, Taiwan Distribution center 18,100
 Contracted (1)


(1)Contracted through a third-party warehouse management company.

Logitech2023, the majority of our properties are leased; however, we also contractsown some of the manufacturing units and employee dormitories in Suzhou, China, from which we occupy approximately 720,000 square feet. We anticipate no difficulty in extending the leases of our facilities or obtaining comparable facilities in suitable locations. We also contract with various third-party distribution services throughout the worldcenters in North America, South America, Europe and Asia Pacific for additional warehouses in which we store inventory. We also have leased sales offices in approximately 60 locations and 40 countries, with various expiration dates from 2016 to 2020.

We believe that Logitech'sour manufacturing and distribution facilities are adequate for our ongoing needs and we continue to evaluate the need for facilities to meet current and anticipated future requirements.
ITEM 3.    LEGAL PROCEEDINGS
From time-to-time, we are involved in claims and legal proceedings that arise in the ordinary course of our business. We are currently subject to several such claims and a small number of legal proceedings. We believe that these matters lack merit and we intend to vigorously defend against them. Based on the currently available information, we do not believe that resolution of pending matters will have a material adverse effect on our financial condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that our defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on our business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against us, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. Any failure to obtain a necessary license or other rights, or litigation arising out of intellectual property claims, could adversely affect our business.
As a result of Regulation S-K disclosure requirements related to environmental proceedings to which the government is a party and such proceedings involve potential monetary sanctions, we selected the quantitative threshold of $1.0 million.
ITEM 4.    MINE SAFETY DISCLOSURES
None.

Logitech International S.A. | Fiscal 2023 Form 10-K | 32

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PART II


ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Logitech's shares are listed and traded on both the SIX Swiss Exchange, where the share price is denominated in Swiss francs, and on the Nasdaq Global Select Market, where the share price is denominated in U.S. Dollars. The trading symbol for Logitech shares is LOGN on the SIX Swiss Exchange and LOGI on Nasdaq.the Nasdaq Global Select Market. As of May 6, 2016,3, 2023, there were 173,106,620 shares issued (including 11,357,73914,368,910 shares held as treasury stock) held by 13,81349,807 holders of record, and the closing price of our shares was CHF 14.5555.40 ($15.0161.89 based on exchange rates on such date) per share on the SIX Swiss Exchange and $15.11$62.68 per share as reported by the Nasdaq Stock Market.
SIX Swiss Exchange
The following table sets forth certain historical share price information for our shares traded on the SIX Swiss Exchange, as reported by the SIX Swiss Exchange.
  SIX Swiss Exchange
  High CHF Low CHF
Fiscal Year Ended March 31, 2016    
First quarter 15.20
 12.70
Second quarter 14.20
 12.15
Third quarter 15.70
 12.30
Fourth quarter 16.45
 13.40
Fiscal Year Ended March 31, 2015  
  
First quarter 13.80
 11.00
Second quarter 13.95
 11.15
Third quarter 14.60
 10.75
Fourth quarter 14.25
 11.60

Nasdaq Global Select Market
The following table sets forth certain historical share price information for our shares traded on the Nasdaq Global Select Market.
  Nasdaq Global Select Market
  High Low
Fiscal Year Ended March 31, 2016  
  
First quarter $16.25
 $13.13
Second quarter 14.87
 12.79
Third quarter 15.73
 12.58
Fourth quarter 16.56
 13.48
Fiscal Year Ended March 31, 2015  
  
First quarter $15.46
 $12.34
Second quarter 15.35
 12.56
Third quarter 15.00
 11.51
Fourth quarter 15.21
 12.50
Dividends
Under Swiss law, a corporation may only pay dividends upon a vote of its shareholders. This vote typically follows the recommendation of the corporation's Board of Directors. In March 2015, we announced a plan to pay $250.0 million in cumulative dividendsMay 2023, the Board of Directors recommended that the Company increase the cash dividend per share for fiscal year 2015 through fiscal year 2017. 2023 by approximately CHF 0.10 per share to CHF 1.06 per share (approximately $1.16 per share based on the exchange rate on March 31, 2023). Based on our shares outstanding, net of treasury shares, as of March 31, 2023 (159,343,273 shares), this would result in an aggregate gross dividend of approximately CHF 168.9 million (approximately $184.2 million based on the exchange rate on March 31, 2023). This amount may vary based on the number of shares outstanding, net of treasury shares, as of the record date for the dividend, but will not exceed approximately CHF 183.5 million (based on our shares currently issued or 173,106,620 shares). This recommendation will be voted on by our shareholders at the Company’s 2023 Annual General Meeting.
On September 9, 2015,14, 2022, Logitech's shareholders approved a cash dividend payment of CHF 83.10.96 per share out of retained earnings to Logitech's shareholders who owned shares on September 27, 2022. Eligible shareholders were paid CHF 0.96 per share ($0.98 per share in U.S. Dollars based on the exchange rate on the date of payment), totaling $158.7 million in U.S. Dollars on September 28, 2022.
On September 8, 2021, Logitech's shareholders approved a cash dividend payment of CHF 147.0 million out of retained earnings to Logitech shareholders who owned shares on September 21, 2015.2021. Eligible shareholders were paid CHF 0.510.87 per share ($0.530.95 per share in U.S. Dollars), totaling $85.9$159.4 million in U.S. Dollars on September 22, 2015. On December 18, 2014, Logitech's shareholders approved a cash dividend payment of CHF 43.1 million out of retained earnings to Logitech shareholders who owned shares on December 29, 2014. Eligible shareholders were paid CHF 0.26 per share ($0.27 per share in U.S. Dollars), totaling $43.8 million in U.S. Dollars on December 30, 2014. On September 4, 2013, Logitech's shareholders approved a cash dividend payment of CHF 33.7 million out of retained earnings to Logitech shareholders who owned shares on September 16, 2013. Eligible shareholders were paid CHF 0.21 per share ($0.22 per share in U.S. Dollars), totaling $36.1 million in U.S. Dollars on September 17, 2013.2021.
Dividends paid and similar cash or in-kind distributions made by Logitech to a holder of Logitech shares (including dividends or liquidation proceeds and stock dividends), other than distributions of qualifying additional paid-in-capital if it is available under the current Swiss tax regime, are subject to a Swiss federal anticipatory tax at a rate of 35%. The anticipatory tax must be withheld by Logitech from the gross distribution and paid to the Swiss Federal Tax Administration.
A Swiss resident holder and beneficial owner of Logitech shares may qualify for a full refund of the Swiss anticipatory tax withheld from such dividends. A holder and beneficial owner of Logitech shares who is a non-resident of Switzerland, but a resident of a country that maintains a double tax treaty with Switzerland, may qualify for a full or partial refund of the Swiss anticipatory tax withheld from such dividends by virtue of the provisions of the applicable treaty between Switzerland and the country of residence of the holder and beneficial owner of the Logitech shares.
In accordance with the tax convention between the United States and the Swiss Confederation ("Treaty")(Treaty), a mechanism is provided whereby a U.S. resident (as determined under the Treaty), and U.S. corporations, other than U.S. corporations having a "permanent establishment" or a fixed base, as defined in the Treaty, in Switzerland, generally can obtain a refund of the Swiss anticipatory tax withheld from dividends in respect of Logitech shares, to the extent that 15% of the gross dividend is withheld as final withholding tax (i.e. 20% of the gross dividend may generally be refunded). In specific cases, U.S. companies not having a "permanent establishment" or a fixed base in Switzerland owning at least 10% of Logitech registered shares may receive a refund of the Swiss anticipatory tax withheld from dividends to the extent it exceeds 5% of the gross dividend (i.e., 30% of the gross dividend may be refunded). To get the benefit of a refund, holders must beneficially own Logitech shares at the time such dividend becomes due.

Logitech International S.A. | Fiscal 2023 Form 10-K | 33

Table of Contents
Share Repurchases
In fiscal year 2023, the following approved share repurchase program was in place (in thousands):
Share Repurchase ProgramApproved Shares
Approved Amounts (1)
May 202017,311 $1,500,000 
(1) In April 2021, our Board of Directors approved an increase of $750.0 million of the 2020 share repurchase program, to an aggregate amount of $1.0 billion. The Swiss Takeover Board approved this increase and it became effective on May 21, 2021. In July 2022, our Board of Directors approved an increase of $500 million to the 2020 share repurchase program, to an aggregate amount of up to $1.5 billion. The Swiss Takeover Board approved this increase and it became effective on August 19, 2022.
The following table presentstables present certain information related to purchases made by Logitech of its equity securities under its publicly announced share buyback programrepurchase programs (in thousands, except per share amounts):
    Weighted Average Price Per Share 
Amount
Available for
Repurchase
During Fiscal Year Ended 
Shares
Repurchased
 CHF USD 
March 31, 2014 —
 —
 —
 $250,000
March 31, 2015 115
 —
 14.43
 248,337
March 31, 2016 4,951
 13.52
 14.63
 178,298
  5,066
  
  
  
Weighted Average Price Per ShareRemaining Amount that May Yet Be
Repurchased under the Program
During Fiscal Year Ended
Shares
Repurchased(1)
CHF (LOGN)USD (LOGI)
March 31, 20211,845 81.3589.20 $85,382 
March 31, 20224,607 82.1589.36 $423,696 
March 31, 20237,562 52.94 55.25 $505,844 
(1)In fiscal year 2016,2021, 2022 and 2023, the following approved share buyback programs were in place:number of shares repurchased on the SIX was 1.0 million, 3.9 million, and 7.4 million, respectively, and the number of shares repurchased on NASDAQ was 0.9 million, 0.7 million, and 0.2 million, respectively.
Share Buyback ProgramShares Approved Amounts
March 201417,311
 $250,000


Total Number of Shares
Repurchased		Weighted Average Price Paid Per ShareRemaining Amount that May Yet Be
Repurchased under the Program
During the three months ended March 31, 2023CHF (LOGN)USD (LOGI)
Month 1
January 1, 2023 to January 27, 2023
SIX644 55.24 — $557,808 
Month 2
January 28, 2023 to February 24, 2023
SIX20253.61— 546,102 
Nasdaq5459.00 542,904 
Month 3
February 24, 2023 to March 31, 2023
SIX69549.11— 505,844 
1,595 52.3356.68 $505,844 
Performance Graph
The information contained in the Performance Graph shall not be deemed to be "soliciting material" or "filed" with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")Exchange Act), except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the "Securities Act")Securities Act), or the Exchange Act.Act.
Logitech International S.A. | Fiscal 2023 Form 10-K | 34

Table of Contents
The following graph compares the cumulative total stockholder return on our shares, the Nasdaq Composite Index, and the S&P 500 Information and Technology Index. The graph assumes that $100 was invested in our LOGI shares, the Nasdaq Composite Index and the S&P 500 Information and Technology Index on March 31, 2011,2018 and calculates the annual return through March 31, 2016.2023. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
6294



*$100 invested on March 31, 20112018, in stock or index, including reinvestment of dividends.
Fiscal year ending March 31.
Copyright© 2015 S&P, a division of The McGraw-Hill Companies2023 Standard & Poor's, Inc. Used with permission. All rights reserved.


 March 31,
 201820192020202120222023
Logitech$100 $109 $121 $298 $212 $171 
Nasdaq Composite Index$100 $111 $111 $193 $209 $181 
S&P 500 Information and Technology Index$100 $115 $127 $212 $257 $245 
  March 31,
  2011 2012 2013 2014 2015 2016
Logitech $100
 $43
 $42
 $92
 $83
 $104
Nasdaq Composite Index $100
 $114
 $122
 $160
 $187
 $187
S&P 500 Information and Technology Index $100
 $120
 $119
 $149
 $176
 $191


ITEM 6. Selected Financial Data(Reserved)
This financial data should be read in conjunction with Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. These historical results are not necessarily indicative of the results to be expected in the future.


Logitech International S.A. | Fiscal 2023 Form 10-K | 35
  Years ended March 31,
  
2016(2)
 
2015(2)
 
2014(2)
 
2013(2)
 
2012(2)
        (unaudited) (unaudited)
  (in thousands, except for per share amounts)
Consolidated statement of operations and cash flow data  
  
  
  
  
Net sales $2,018,100
 $2,004,908
 $2,008,028
 $1,962,237
 $2,168,742
Cost of goods sold 1,337,053
 1,299,451
 1,346,489
 1,331,579
 1,449,489
Gross profit 681,047
 705,457
 661,539
 630,658
 719,253
Operating expenses:  
  
  
  
  
Marketing and selling 319,015
 321,749
 322,707
 360,245
 350,218
Research and development 113,624
 108,306
 112,446
 123,864
 129,717
General and administrative 101,548
 125,995
 112,689
 108,480
 101,621
Impairment of goodwill and other assets —
 —
 —
 2,188
 —
Restructuring charges (credits), net (1) 17,802
 (4,777) 8,001
 39,455
 —
Total operating expenses 551,989
 551,273
 555,843
 634,232
 581,556
Operating income (loss) 129,058
 154,184
 105,696
 (3,574) 137,697
Interest income (expense), net 790
 1,197
 (431) 870
 2,634
Other income (expense), net 1,624
 (2,298) 2,039
 (2,139) 7,933
Income (loss) from continuing operations before income taxes 131,472
 153,083
 107,304
 (4,843) 148,264
Provision for (benefit from) income taxes 3,110
 4,654
 1,313
 (26,376) 21,545
Net income from continuing operations 128,362
 148,429
 105,991
 21,533
 126,719
Loss from discontinued operations, net of income taxes (9,045) (139,146) (31,687) (249,051) (22,482)
Net income (loss) 119,317
 9,283
 74,304
 (227,518) 104,237
           
Net income (loss) per share - basic:  
  
  
  
  
Continuing operations $0.79
 $0.91
 $0.66
 $0.14
 $0.73
Discontinued operations $(0.06) $(0.85) $(0.20) $(1.58) $(0.13)
Net income (loss) per share - diluted $0.73
 $0.06
 $0.46
 $(1.44) $0.60
           
Income (loss) per share - diluted:          
Continuing operations $0.77
 $0.89
 $0.65
 $0.14
 $0.72
Discontinued operations $(0.05) $(0.83) $(0.19) $(1.57) $(0.13)
Net income (loss) per share - diluted $0.72
 $0.06
 $0.46
 $(1.43) $0.59
           
Weighted average shares used to compute net income (loss) per share:  
  
  
  
  
Basic 163,296
 163,536
 160,619
 158,468
 174,648
Diluted 165,792
 166,174
 162,526
 159,445
 175,591
           
Cash dividend per share $0.53
 $0.27
 $0.22
 $0.85
 $—
           
Net cash provided by operating activities $183,111
 $178,632
 $205,421
 $122,389
 $202,534
Net cash used in investing activities $(60,690) $(48,289) $(46,803) $(57,723) $(57,602)

Table of Contents
  March 31,
  2016 2015 
2014(3)
 
2013(3)
 
2012(3)
Consolidated balance sheet data  
  
  
  
  
Cash and cash equivalents $519,195
 $533,380
 $467,518
 $331,498
 $474,961
Total assets $1,324,147
 $1,426,680
 $1,451,390
 $1,382,333
 $1,858,009
Total shareholders' equity $759,948
 $758,134
 $804,128
 $721,953
 $1,131,791


(1)During Fiscal year 2016, we incurred restructuring charges of $17.8 million related to the restructuring plan we implemented in fiscal 2016. The $4.8 million in restructuring credits during fiscal year 2015 were related to restructuring plans we implemented in fiscal year 2014. The $8.0 million and $39.5 million in restructuring costs during fiscal years 2014 and 2013 were related to restructuring plans we implemented in fiscal years 2014 and 2013.

(2)On December 28, 2015, we divested our Lifesize video conferencing business and, as a result, we have reflected the Lifesize video conferencing business as discontinued operations in our consolidated statements of operations and, as such, the results of that business have been excluded from all line items of statements of operations other than “Loss from discontinued operations, net of income taxes” for all periods presented.

(3)The above condensed consolidated cash and cash equivalents exclude Lifesize video conferencing business which is presented as discontinued operations. See Note 3, "Discontinued Operations" to our consolidated financial statements for additional information.

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these statements as a result of certain factors, including those set forth above in Item 1A Risk"Risk Factors," and belowin Item 7A, Quantitative"Quantitative and Qualitative Disclosures about Market Risk." Please read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.
Overview of Our Company
LogitechLogitech’s mission is to help all people pursue their passions in a world leader in designing productsway that have an every day place in people's lives, connecting them tois good for people and the digital experiences they care about. Over 30 years ago we started connecting people through computers, and now we are designing products that bring people together through music, gaming, video and computing. 
planet. We design, manufacture, and marketsell products that allowhelp businesses thrive and bring people to connecttogether when working, creating, gaming and streaming. We sell these products through music, gaming, video, computing,a number of brands: Logitech, Logitech G (including ASTRO Gaming, Streamlabs, and other digital platforms. Blue Microphones) and Ultimate Ears.
Our products participate in fiveaddress primarily four large markets that all have growth potential: Music,market opportunities: Creativity & Productivity, Gaming, Video Collaboration Home, and Creativity and Productivity.
Music. We sell our products to a broad network of domestic and international customers, including direct sales to retailers, e-tailers, and end consumers through our e-commerce platform, and indirect sales to end customers through distributors. Our worldwide retail network includes consumer electronics distributors, retailers, mass merchandisers, specialty electronics stores, computer and telecommunications stores, value-added resellers and online merchants.
We seek to fulfill the increasing demand for interfaces between people and the expanding digital world across multiple platforms and user environments. The interface evolves as platforms, user models and our target markets evolve. As access to digital information has expanded, we have extended our focus to mobile devices, the digital home, and the digital world. All of these platforms require interfaces that are customized according to how the devices are used. We believe that continued investment in product research and development is critical to creating the innovation required to strengthen our competitive advantage and to drive future sales growth. We are committed to identifying and meeting current and future consumer trends with new and improved product technologies, as well as leveraging the value of the Logitech brand from a competitive, channel partner, and consumer experience perspective.
We believe that innovation, design and product quality are important to gaining market acceptance and maintaining market leadership.
From time to time, we may seek to partner with or acquire, when appropriate, companies that have products, personnel, and technologies that complement our strategic direction. We continually review our product offerings and our strategic direction in light of our profitability targets, competitive conditions, changing consumer trends and the evolving nature of the interface between the consumer and the digital world.
Impacts of Macroeconomic and Geopolitical Conditions on our Business
In fiscal years prioryear 2023, our business was impacted by adverse macroeconomic and geopolitical conditions. These conditions included inflation, foreign currency fluctuations, and slowdown of economic activity around the world, in part due to rising interest rates, and lower consumer and enterprise spending. In addition, the war in Ukraine resulted in global supply chain, logistics, and inflationary challenges. We had no revenue in Russia and Ukraine in fiscal year 2016,2023 as we have indefinitely ceased all sales and shipments to Russia and sales in Ukraine have also been halted due to the ongoing military operations on the Ukrainian territory.
The global and regional economic and political conditions adversely affect demand for our products. These conditions also had two segments: Peripherals, including retailan impact on our suppliers, contract manufacturers, logistics providers, and OEM products;distributors, causing volatility in cost of materials and Lifesize Video Conferencing. During fiscal year 2016, we divested the Lifesize Video Conferencing segment,shipping and exited the OEM business. Our financial results treat the Lifesize segmenttransportation rates, and as discontinued operations for all the periods presented in this Annual Report on Form 10-K. As a result, sales of products through our retail channels represented 96%, 94% and 93%impacting the pricing of our net sales forproducts.
For additional information, see "Liquidity and Capital Resources" below and Item 1A "Risk Factors," including under the fiscal years 2016, 2015caption "Adverse global and 2014, respectively.
On April 20, 2016, we acquired Jaybird LLC of Salt Lake City, Utah, ("Jaybird") for approximately $50 million in cash, with an additional earn-out of up to $45 million based on achievement of growth targets over two years. Jaybird is a leader in wireless audio wearables for sportsregional economic and active lifestyles, and the acquisition of Jaybird expandsgeopolitical conditions can materially adversely affect our long-term growth potential in our Music market.
On December 28, 2015, we and Lifesize, Inc., a wholly owned subsidiary of Logitech which holds the assets of our Lifesize video conferencing business, entered into a stock purchase agreement with three venture capital firms. Immediately following the December 28, 2015 closing of the transaction, the venture capital firms held 62.5% of the outstanding shares of Lifesize, which resulted in a divestiture of the Lifesize video conferencing business by us. The historical results of operations and the financial positioncondition," “We purchase key components and products from a limited number of Lifesize are included in the consolidated financial statementssources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of Logitech and are reported as discontinued operations within this Annual Report on Form 10-K. Unless

indicated otherwise, the information included in Item 7 relates to our continuingrequired components,” “Our principal manufacturing operations and historical financial information has been recastthird-party contract manufacturers are located in China and Southeast Asia, which exposes us to conform to this new presentation within our financial statements.
We exited our OEM business during our fiscal quarter ended December 31, 2015. The results of our OEM business are included in our financial statements as part of continuing operations for the nine months ended December 31, 2015 and prior periods. There is no revenue and costrisks associated with thisdoing business in three months ended March 31, 2016,that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations,” “If we do not expect any in future periods.accurately forecast market demand for our products, our business and operating results could be adversely affected,” and "If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales and our business and operating results could be adversely affected.”
Summary
Trends and Uncertainties
Several long-term secular-trends offer long-term structural growth opportunities across Logitech’s product portfolio, including work and learn from anywhere (hybrid work), video everywhere, the rise of Financial Results
Our total net salessocial gaming for fiscal year 2016 increased 1% in comparisonparticipants and spectators, and the democratization of digital content creation. We design, create and sell products that benefit from these secular trends. The culture of hybrid work and learn provides an opportunity to fiscal year 2015 due to an increase in retail sales, partially offset by a decrease in OEM sales as a result of exiting the OEM businessequip meeting rooms, classrooms and personal workspaces, at home or in the third quarter ended December 31, 2015.office. It also provides an opportunity for increased commercial and consumer adoption of video conferencing. Our video collaboration products are compatible with a variety of video conference platforms, including Zoom, Microsoft Teams, Google Meet, etc. Moving from work to play, Logitech gaming and streaming products benefit from social gaming which continues to
Retail sales during fiscal year 2016 increased 3% compared
Logitech International S.A. | Fiscal 2023 Form 10-K | 36

gain popularity through online gaming, multi-platform experiences and esports. In addition, the democratization of digital content creation presents an opportunity for anyone to fiscal year 2015. Retail sales increased 3%be a content creator because of the accessibility of the tools necessary to code, design, create, make music, game or broadcast to professional standards.
While we believe we will further benefit from these secular trends, we have experienced and 10%will continue to experience challenges that impact our business and financial results. These challenges include (i) the current macroeconomic environment, including interest rate fluctuations, inflation, foreign exchange movements and low economic growth in certain regions, (ii) low consumer confidence and recent declines in enterprise spending leading to reduced demand for some of our products, (iii) the Americas ("AMR")uncertainty in strategy and Asia Pacific, respectively, partially offset by a decreasetiming of 1% in EMEA.
Our gross marginenterprises’ “return-to-office” impacting demand for fiscal year 2016 decreased to 33.7%, compared to 35.2% for fiscal year 2015. The decrease in gross margin is primarily driven by the unfavorable fluctuations in currency exchange rates, partially offset by sales price increases and savings from supply chain efficiencies related to freight.
Operating expenses for fiscal year 2016 were 27.4% of net sales, compared to 27.5% for fiscal year 2015. The decrease was primarily due to the savings from general and administration expenses reduction related to the prior year's independent Audit committee investigation and related expenses, partially offset by the increase in research and development expense and restructuring costs related to our restructuring plan announced in April 2015.
Net income from continuing operations for fiscal year 2016 was $128.4 million, compared to $148.4 million for fiscal year 2015.
Trends in Our Business
In 2016, we announced our intention to focus on five large markets, or domains, collections of categories, going forward. Our strategy focuses on five large multi-category markets including Music, Gaming, Video Collaboration Home and Creativity & Productivity. products, and (iv) the timing of further development of our business-to-business go-to-market capabilities.
We see opportunitiesexpect these challenges to deliver growth with products in all these markets.
We believe our future growth will be determined by our ability to rapidly create innovative products across multiple digital platforms, including gaming and digital music devices. The following discussion represents key trends specific to our market opportunities.
Trends Specific to Our Five Market Opportunities
Music: The music market grew during fiscal year 2016 driven by growing consumption of music through mobile devices such as smartphones and tablets. This market growth, together with our investmentscontinue in the UE brand,near-term. We have taken steps to mitigate the impact of these challenges, including but not limited to: (i) reduction in our introductionoperating expenses as revenues have declined in order to maintain margins and size the business for the current market, (ii) reduction in inventories to more appropriately align with demand, (iii) continued investment in our business-to-business direct sales channel in order to improve performance, and (iv) release of new products and our ability to gain market share during fiscal year 2016, has driven our growth in this market.
Gaming: The PC Gaming platform continues to show strong growth as online gaming and multi-platform experiences gain greater popularity and gaming content becomes increasingly more demanding. We believe Logitech is well positioned to benefit fromincrease the gaming market growth.
Video Collaboration:  We are continuing our efforts to create and sell innovative products, including Video Collaboration products, to accommodate the increasing demand from medium sized meeting rooms to small sized rooms such as huddle rooms. During fiscal year 2016, we launched Logitech Group, a transformation in team collaboration that provides high-quality HD video conferencing for groups of up to 20 people and works with the video conferencing applications already in use. We will continue to invest in selected business specific products, targeted product marketing and sales channel development.
Home: This market increased in fiscal year 2016. We are continuing our efforts to sell our Harmony products in this market.
Creativity & Productivity: Although the consumer demand for PC peripherals is slowing, the installed base of PC users is large. We believe that innovative PC peripherals, such as our mice and keyboards, can renew the PC usage experience, providing growth opportunities. Smaller mobile computing devices, such as tablets with touch

interfaces, have created new markets and usage models for peripherals and accessories. We offer a number of products to enhance the use of mobile devices, including keyboard folios for the iPad and iPad mini, and keyboard covers and folios for the iPad Air. However, we have seen the market decline through fiscal year 2016 for the iPad platform, which has impacted the salesvalue proposition of our tablet accessories.portfolio.
Business Application Suite
In fiscal year 2016, we implemented the upgrade of our worldwide business application suite from Oracle version 11i to Oracle version R12. This upgrade created delays in our processing of customer claims related to cooperative marketing arrangements, direct and indirect customer incentive programs and pricing programs. While we are working on enhancing the operational efficiency of the claims processing module in our worldwide business application suite, this has resulted and it may continue to result in higher accruals and allowances for such programs.
Business Seasonality and Product Introductions
We have historically experienced higher net sales in itsour third fiscal quarter ending December 31, compared to other fiscal quarters in itsour fiscal year, primarily due in part to seasonalthe increased consumer demand for our products during the year-end holiday demand.buying season and year-end spending by enterprises. Additionally, new product introductions and business acquisitions can significantly impact net sales, product costs and operating expenses. Product introductions can also impact our net sales to its distribution channels as these channels are filled with new product inventory following a product introduction, and often channel inventory of an earlier model product declines as the next related major product launch approaches. Net salesSales can also be affected when consumers and distributors anticipate a product introduction.introduction or changes in business circumstances. However, neither historical seasonal patterns nor historical patterns of product introductions should be considered reliable indicators of our future pattern of product introductions, future net sales or financial performance. Furthermore, cash flow is correspondingly lower in the first half of our fiscal year as we typically build inventories in advance for the third quarter and we pay an annual dividend following our Annual General Meeting, which is typically in September.
Summary of Financial Results
Our total sales for fiscal year 2023 decreased 17%, compared to fiscal year 2022, primarily driven by a decline in sales of all of our product categories as a result of lower demand and unfavorable changes in currency exchange rates.
Sales for fiscal year 2023 decreased 25%, 17% and 9% in the EMEA, Americas and Asia Pacific regions, respectively, compared to fiscal year 2022.
Gross margin for fiscal year 2023 decreased by 340basis points to 37.9%, compared to fiscal year 2022, primarily due toinflationary pressure on costs and unfavorable impacts from changes in currency exchange rates, partially offset by a reduction in our use of expedited shipping.
Operating expenses for fiscal year 2023 were $1,261.0 million, or 27.8% of sales, compared to $1,489.0 million, or 27.2% of sales, for fiscal year 2022. The decrease in operating expenses was primarily driven by a reduction in marketing and advertising spend.
Included in the income tax provision of $98.9 million and $131.3 million in fiscal year 2023 and 2022 was $48.3 million and $88.7 million, respectively, of tax expense from Switzerland.
Net income for fiscal year 2023 was $364.6 million, compared to $644.5 million for fiscal year 2022, reflecting lower sales and gross margin, partially offset by a reduction in operating expenses.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP (Generally Accepted Accounting Principles in the United States of America) requires us to make assumptions, judgments, estimates and assumptionsestimates that affect reported amounts of assets, liabilities, net sales and expenses, and the disclosure of contingent assets and liabilities.
Logitech International S.A. | Fiscal 2023 Form 10-K | 37

We consider an accounting estimate critical if it: (i) requires management to make judgments and estimates about matters that are inherently uncertain; and (ii) is important to an understanding of our financial condition and operating results.
We base our assumptions, judgments and estimates on historical experience and on various other assumptionsfactors that we believe to be reasonable under the circumstances. Although these assumptions, judgments, and estimates are based on management's best knowledge of current events and actions that may impact us in the future, actual results could differ from those estimates.differ. Management has discussed the development, selection and disclosure of these critical accounting estimates with the Audit Committee of the Board of Directors.
We believe the following accounting estimates are most critical to our business operations and to an understanding of our financial condition and results of operations and reflect the more significant judgments and estimates used in the preparation of our consolidated financial statements.
Accruals for Customer Programs and Product Returns
We record accruals for cooperative marketing, arrangements, customer incentive, programs, pricing programs ("Customer Programs") and product returns. An allowance against accounts receivable is recorded for accruals and program activity related to our direct customers and indirect customers who receive payments for program activity through our direct customers. A liability is recorded for accruals and program activity related to our indirect customers who receive payments directly and do not have a right of offset against a receivable balance. The estimated cost of these programs is usually recorded as a reduction of revenue. If we receive a separately identifiable benefit from the customer and can reasonably estimate the fair value of that benefit, such cost is reflected in operating expenses. Significant management judgmentjudgments and estimates must be used to determine the cost of these programs in any accounting period.
Cooperative Marketing Arrangements.    We enter into customer marketing Customer Programs require management to estimate the percentage of those programs with many of our distributionthat will not be claimed in the current period or will not be earned by customers, which is commonly referred to as "breakage." Breakage is estimated based on historical claim experience, the period in which the claims are expected to be submitted, specific terms and retailconditions with customers, and with certain indirect partners, allowing customers toother factors. If we receive a credit equal toseparately identifiable benefit from a set percentagecustomer and can reasonably estimate the fair value of their purchasesthat benefit, the cost of our products, or a fixed dollar credit for various marketing programs. The objective of these arrangementsthe Customer Programs is to encourage advertising and promotional events to increase sales of ourrecognized in operating expenses.

products. Accruals for these marketing arrangements are recorded at the later of time of sale or time of commitment, based on negotiated terms, historical experience and inventory levels in the channel.
Customer Incentive Programs.    Customer incentive programs include performance-based incentives and consumer rebates. We offer performance-based incentives to our distribution customers, retail customers and indirect partners based on pre-determined performance criteria. Accruals for performance-based incentives are recognized as a reduction of the sale price at the time of sale. Estimates of required accruals are determined based on negotiated terms, consideration of historical experience, anticipated volume of future purchases, and inventory levels in the channel. Consumer rebates are offered from time to time at our discretion for the primary benefit of end-users. Accruals for the estimated costs of consumer rebates and similar incentives are recorded at the later of time of sale or when the incentive is offered, based on the specific terms and conditions. CertainCustomer incentive programs including consumer rebates, require managementare considered variable consideration, which we estimate and record as a reduction to estimate the number of customers who will actually redeem the incentive based on historical experience and the specific terms and conditions of particular programs.
Pricing Programs.    We have agreements with certain customers that contain terms allowing price protection credits to be issued in the event of a subsequent price reduction. At our discretion, we also offer special pricing discounts to certain customers. Special pricing discounts are usually offered only for limited time periods or for sales of selected products to specific indirect partners. Our decision to make price reductions is influenced by product life cycle stage, market acceptance of products, the competitive environment, new product introductions and other factors. Accruals for estimated expected future pricing actions are recognizedrevenue at the time of sale based on analysisnegotiated terms, historical experiences, forecasted incentives, the anticipated volume of historical pricing actions by customerfuture purchases, and by products, inventories owned by and located at distributors and retailers, current customer demand, current operating conditions, and other relevant customer and product information, such as stage of product life-cycle.inventory levels in the channel.
Product Returns.    We grant limited rights to return products. Return rights vary by customer and range from just the right to return the defective product to stock rotation rights limited to a percentage of sales approved by management. Estimates of expected future product returns are recognized at the time of sale based on analyses of historical return trends by the customer and by product, inventories owned by and located at distributors and retailers,customers, current customer demand, current operating conditions, and other relevant customer and product information. Upon recognition, we reduce sales and cost of salesgoods sold for the estimated return. Return trends are influenced by product life cycle status, new product introductions, market acceptance of products, sales levels, product sell-through, the type of customer, seasonality, product quality issues, competitive pressures, operational policies and procedures, and other factors. Return rates can fluctuate over time but are sufficiently predictable to allow us to estimate expected future product returns.
We apply a breakage rate to reduce our accruals of Customer Programs based on the estimated percentage of these Customer Programs that will not be claimed or earned. The breakage rate is applied at the time of sale. Assessing the period in which claims are expected to be submitted and the relevance of the historical claim experience require significant management judgment to estimate the breakage of Customer Programs in any accounting period.
We regularly evaluate the adequacy of our accruals for cooperative marketing arrangements, customer incentive programs, pricing programsCustomer Programs and product returns. Future market conditions and product transitions may require us to take action to increase such programs. In addition, when the variables used to estimate these costs change, or if actual costs differ significantly from the estimates, we would be required to record incremental increases or reductions to revenue or operating expenses. If, at any future time, we become unable to reasonably estimate these costs, recognition of revenue might be deferred until products are sold to users, which would adversely impact revenue in the period of transition.
Inventory Valuation
We must order components for our products and build inventory in advance of customer orders. Further, our industry is characterized by rapid technological change, short-term customer commitments and rapid changes in demand.
Logitech International S.A. | Fiscal 2023 Form 10-K | 38

We record inventories at the lower of cost or marketand net realizable value and record write-downs of inventories that are obsolete or in excess of anticipated demand or marketnet realizable value. A review of inventory is performed each fiscal quarter that considers factors including the marketability and product life cyclelifecycle stage, product development plans, component cost trends, historical sales, and demand forecasts that consider the assumptions about future demand and current sales levels.market conditions. Inventory on hand whichthat is not expected to be sold or utilized is considered excess, and we recognize the write-down in the cost of goods sold at the time of such determination. The write-down is determined by comparisonthe excess of the replacement cost withover net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less anyreasonably predictable costs of completion, disposal and disposal (net realizable value) and the net realizable value less the normal profit margin.transportation. At the time of loss recognition, new cost basis per unit and the lower-cost basis for that inventory are established and subsequent changes in facts and circumstances would not result in an increase in the cost basis. If there is an abrupt and substantial decline in demand for Logitech's products or an unanticipated change in technological or customer requirements, we may be required to record additional write-downs that could adversely affect gross margins in the period when the write-downs are recorded.

Share-Based Compensation Expense
Share-based compensation expense includes compensation expense reduced for estimated forfeitures. The grant date fair value for stock options We also extend the assessment to non-cancelable purchase orders if the inventories are considered excess and stock purchase rightsrecord the liability that is estimated using the Black-Scholes-Merton option-pricing valuation model. The grant date fair value of RSUs (restricted stock units) that vest upon meeting certain market conditions is estimated using the Monte-Carlo simulation method. The grant date fair value of time-based RSUsreasonably possible to be incurred in accrued and RSUs with performance conditions is calculated based on the closing market price on the date of grant, adjusted by estimated dividends yield prior to vesting.
Our estimates of share-based compensation expense require a number of complex and subjective assumptions including our stock price volatility, employee exercise patterns, future forfeitures, probability of achievement of the set performance conditions, dividend yield, related tax effects and the selection of an appropriate fair value model. We estimate expected share price volatility based on historical volatility using daily prices over the term of past options, RSUs or purchase offerings, as we consider historical share price volatility as most representative of future volatility. We estimate expected life based on historical settlement rates, which we believe are most representative of future exercise and post-vesting termination behaviors. We use historical data to estimate pre-vesting forfeitures, and we record share-based compensation expense only for those awards that are expected to vest. The dividend yield assumption is based on our history and expectations of future dividend payouts.
The assumptions used in calculating the fair value of share-based compensation expense and related tax effects represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, or if we decide to use a different valuation model, our share-based compensation expense could be materially different in the future from what we have recorded in the current period, which could materially affect our results of operations.other liabilities.
Accounting for Income Taxes
We operate in multiple jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. Our effective income tax rate may be affected by the changes in or interpretations of tax laws and tax agreements in any given jurisdiction, utilization of net operating loss and tax credit carryforwards, changes in geographical mix of income and expense, and changes in our assessment of matters such as the ability to realize deferred tax assets. As a result of these considerations, we must estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating current tax exposure together with assessing temporary differences resulting from the different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet.
We assess the likelihood that our deferred tax assets will be recovered from future taxable income, considering all available evidence such as historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax strategies. When we determine that it is not more likely than not that we will realize all or part of our deferred tax assets, an adjustment is charged to earnings in the period when such determination is made. Likewise, if we later determine that it is more likely than not that all or a part of our deferred tax assets would be realized, the previously provided valuation allowance would be reversed.
We make certain estimates and judgments about the application of tax laws, the expected resolution of uncertain tax positions and other matters surrounding the recognition and measurement of uncertain tax benefits. In the event that uncertain tax positions are resolved for amounts different than our estimates, or the related statutes of limitations expire without the assessment of additional income taxes, we will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur. Such adjustments may have a material impact on our income tax provision and our results of operations.
Goodwill
We conduct a goodwill impairment analysis annually at December 31 or more frequently if indicatorsFor additional information about our Critical Accounting Estimates, see Note 2—Summary of impairment exist or if a decision is madeSignificant Accounting Policies in our Notes to sell or exit a business. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows, a trend of negative or declining cash flows, a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods, or other relevant entity-specific events such as changes in management,

key personnel, strategy or customers, contemplation of bankruptcy, or litigation. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill.
In reviewing goodwill for impairment, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (greater than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the two-step quantitative impairment test; otherwise, no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, proceed directly to the two-step quantitative impairment test. The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether an entity chooses to perform the qualitative assessment or proceeds directly to the two-step quantitative impairment test. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. We currently have only one reporting unit.
Annual Impairment analysis
We performed our annual impairment analysis of the goodwill at December 31, 2015 by performing a qualitative assessment and concluded that it was more likely than not that the fair value of the peripheral reporting unit exceeded its carrying amount. Refer to the Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K for the disclosures.below.
Product Warranty Accrual
We estimate the cost of product warranties at the time the related revenue is recognized based on historical and projected warranty claim rates, historical and projected costs, and knowledge of specific product failures that are outside of our typical experience. Each fiscal quarter, we reevaluate estimates to assess the adequacy of recorded warranty liabilities considering the size of the installed base of products subject to warranty protection and adjust the amounts as necessary. If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty liabilities would be required and could materially affect our results of operations.
Adoption of New Accounting Pronouncements
In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". This new standard raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The standard is effective prospectively for years beginning on or after December 15, 2014, with early application permitted. We adopted ASU No. 2014-08 on April 1, 2015 on a prospective basis and applied the guidance to our disposition of the Lifesize video conferencing business.
In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes” ("ASU 2015-17"). The guidance eliminates the current requirement for an entity to separate deferred income tax liabilities and assets into current and non-current amounts in a classified balance sheet. Instead, the guidance requires deferred tax liabilities, deferred tax assets and valuation allowances be classified as non-current in a classified balance sheet. The ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. We have early adopted the guidance in the fourth quarter of fiscal year 2016 on a prospective basis. Prior periods are therefore not adjusted.
Refer to the Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K for recent accounting pronouncements to be adopted.

Non-GAAP MeasuresInflation Reduction Act in the U.S.
On August 16, 2022, the “Inflation Reduction Act” (H.R. 5376) ("IRA") was signed into law in the U.S. The IRA establishes a new corporate alternative minimum tax based on financial statement income adjusted for certain items. The new minimum tax is effective for tax years beginning after December 31, 2022. We do not expect the IRA will have a material impact to our financial statements when it becomes effective.
Constant Currency
We refer to our net sales growth rates excluding the impact of currency exchange rate fluctuations as "constant dollar" sales. Constant dollarcurrency" sales is a non-GAAP financial measure, which is information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. GAAP. Our management uses these non-GAAP measures in its financial and operational decision-making, and believes these non-GAAP measures, when considered in conjunction with the corresponding GAAP measures, facilitate a better understanding of changes in net sales.growth rates. Percentage of constant dollarcurrency sales growth is calculated by translating prior period sales in each local currency at the current period’s average exchange rate for that currency and comparing that to current period sales. This non-GAAP financial measure is not intended to be considered in isolation from, or as a substitute for, a measure of financial performance prepared in accordance with GAAP. There are inherent limitations associated with the use of this non-GAAP financial measure as an analytical tool. In particular, this non-GAAP financial measure is not based on a comprehensive set of accounting rules or principles, may be different from non-GAAP financial measures used by other companies, and is not necessarily comparable to similarly-titled measures presented by other companies, limiting its usefulness for comparison purposes. Moreover, presentation of revenue on a constant currency basis is provided for year-over-year comparison purposes only, and investors should be cautioned that the effect of changing currency exchange rates has an actual effect on our operating results in U.S. Dollars.  
Given our global sales presence and the reporting of our financial results in U.S. Dollars, our financial results for fiscal year 2016 werecould be affected by significant shifts in currency exchange rates during fiscal year 2016.rates. See “Results of Operations” beginning for information on the effect of currency exchange resultsrate fluctuations on our net sales. If the U.S. Dollar appreciates or depreciates in comparison to other currencies in future periods, this will affect our results of operations in future periods as well.
Logitech International S.A. | Fiscal 2023 Form 10-K | 39

References to Sales
The term “sales” means net sales, except as otherwise specified and the sales growth discussion and sales growth rate percentages are in U.S. Dollars, except as otherwise specified.
Results of Operations
In this section, we discuss the results of our operations for the year ended March 31, 2023 compared to the year ended March 31, 2022. For a discussion of the year ended March 31, 2022 compared to the year ended March 31, 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed with the SEC on May 18, 2022.
Net Sales
NetOur sales by channel for fiscal years 2016, 2015 and 2014 were as follows (Dollars in thousands):
  Years Ended March 31, Change
  2016 2015 2014 2016 vs. 2015 2015 vs. 2014
Retail $1,947,059
 $1,887,446
 $1,866,279
 3 % 1 %
OEM 71,041
 117,462
 141,749
 (40) (17)
Total net sales    $2,018,100
 $2,004,908
 $2,008,028
 1
 —
Retail:
During fiscal year 2016, retail sales increased 3%2023 decreased 17%, in comparisoncompared to fiscal year 2015.2022, driven by a decline in sales of all of our product categories. Our sales were negatively impacted from lower demand and unfavorable changes in currency exchange rates. If currency exchange rates had been constant in 2016fiscal years 2023 and 2015,2022, our sales decline in constant dollar retail salescurrency would have increased 9%. The increase in sales was driven by double digit growth in Mobile Speakers, Gaming and Video Collaboration product categories.
During fiscal year 2015, retail sales increased 1%, compared to fiscal year 2014. If currency exchange rates had been constant in 2015 and 2014, our constant dollar retail sales would have increased 4%13%. The increase in retail sales is primarily due to triple-digit growth in Mobile Speakers and Video Collaboration product categories, and double-digit growth in Gaming product category, partially offset by declines in Audio-PC & Wearables, Tablet & Other Accessories, PC webcams and the other product categories, compared to fiscal year 2014.
OEM:
During fiscal year 2016, OEM sales decreased 40%, compared to fiscal year 2015. The decline was primarily due to the exit from our OEM business in December 2015, and there was no revenue during the quarter ended March 31, 2016.
During fiscal year 2015, OEM sales decreased 17% compared to fiscal year 2014.

Sales Denominated in Other Currencies
Although our financial results are reported in U.S. Dollars, a portion of our sales werewas generated in currencies other than the U.S. Dollar, such as the Euro, Chinese Renminbi, Japanese Yen, Australian Dollar, Canadian Dollar, Pound Sterling and New Taiwan Dollar, British PoundDollar. For the years ended March 31, 2023 and Australian Dollar. During fiscal years 2016, 20152022, approximately 51% and 2014, 48%50%, 47% and 48%respectively, of our net sales were denominated in currencies other than the U.S. Dollar, respectively.Dollar.
Retail Sales by Region
The following table presents the change in retail sales by region for fiscal year 20162023 compared with fiscal year 2015, and2022:
 2023 vs. 2022
Sales Growth RateSales Growth Rate in Constant Currency
Americas(17)%(17)%
EMEA(25)(17)
Asia Pacific(9)(3)
Americas:
The decrease in sales in the Americas region for fiscal year 2015 compared with fiscal year 2014:
  2016 vs. 2015 2015 vs. 2014
Americas 3 % 8 %
EMEA (1) (7)
Asia Pacific 10
 2
Americas
During fiscal year 2016, retail sales in Americas increased 3%,2023, compared to fiscal year 2015. If currency exchange rates had been constant2022, was primarily driven by decreases in 2016sales for Gaming, Video Collaboration, PC Webcams and 2015, our constant dollar retailAudio & Wearables.
EMEA:
The decrease in sales would have increased 5% in the Americas. This increase was led by double digit growth in the Video Collaboration product category mainly from the Webcam C930e, ConfereneceCam Connect, and PTZ Pro Camera, and double digit growth in the Mobile Speakers product category driven by the UE Boom 2 as well as the UE Megaboom.
DuringEMEA region for fiscal year 2015, retail sales in Americas increased 8%,2023, compared to fiscal year 2014. If currency exchange rates had been constant2022, was primarily driven by decreases in 2015sales in Gaming, Keyboards & Combos, PC Webcams and 2014, our constant dollar retailPointing Devices.
Asia Pacific:
The decrease in sales would have increased 9% in the Americas. We achieved sales increases in all categories except Audio-PC & Wearables, PC webcams, and Tablets & Other Accessories. This increase was led by triple digit growth in Mobile Speakers mainly from UE BOOM and UE MEGABOOM, and triple digit growth in the Video Collaboration product category mainly from our ConferenceCam CC3000e and Webcam C930e.
EMEA
DuringAsia Pacific region for fiscal year 2016, retail sales in EMEA decreased 1%,2023, compared to fiscal year 2015. If currency exchange rates had been constant in 2016 and 2015, our constant dollar retail sales would have increased 9% in the EMEA region. Double digit growth in Gaming, Video Collaboration and Mobile Speakers product categories were offset2022, was primarily driven by declines in all other product categories.
During fiscal year 2015, retail sales in EMEA decreased 7%, compared to fiscal year 2014. If currency exchange rates had been constant in 2015 and 2014, our constant dollar retail sales would have decreased 3% in the EMEA region. Retail sales decreased across all categories except Gaming, Mobile Speakers, Video Collaboration, Home Control and Keyboards and Combos product categories. The decline decreases in sales was heavily impacted by market weakness in Russia and Ukraine. We achieved triple digit growth in the Video Collaboration product category, and double digit growth in both Mobile Speakers and Gaming product categories during fiscal year 2015 compared to fiscal year 2014.
Asia Pacific
During fiscal year 2016, retail sales in Asia Pacific increased 10%, compared to fiscal year 2015. If currency exchange rates had been constant in 2016 and 2015, our constant dollar retail sales would have increased 15% in the Asia Pacific region. We achieved double digit growth in Video Collaboration,of Keyboards & Combos, PC Webcams, Mobile SpeakersAudio & Wearables, and Gaming product categories,Video Collaboration, partially offset by the declinean increase in Tablets & Other Accessories and Home Control product categories.sales of Gaming.
During fiscal year 2015, retail sales in Asia Pacific increased 2%, compared to fiscal year 2014. If currency exchange rates had been constant in 2015 and 2014, our constant dollar retail sales would have increased 4% in the Asia Pacific region. We achieved triple digit growth in both Mobile Speakers and Video Collaboration product categories, partially offset by the decline in Tablets & Other Accessories, Audio - PC Wearables, and Other categories.
Logitech International S.A. | Fiscal 2023 Form 10-K | 40

Net Retail Sales by Product Categories
Net retail salesSales by product categories for fiscal years 2016, 20152023 and 20142022 were as follows (Dollars in thousands):
 Years Ended March 31,Change
 202320222023 vs. 2022
Pointing Devices$728,357 $781,108 (7)%
Keyboards & Combos836,432 967,301 (14)
PC Webcams227,692 403,651 (44)
Tablet & Other Accessories254,374 310,123 (18)
Gaming (1)
1,211,485 1,451,883 (17)
Video Collaboration887,517 997,164 (11)
Mobile Speakers111,649 149,782 (25)
Audio & Wearables274,231 401,424 (32)
Other (2)
7,081 18,665 (62)
Total Sales$4,538,818 $5,481,101 (17)%
  Years Ended March 31, Change
  2016 2015 2014 2016 vs. 2015 2015 vs. 2014
Mobile Speakers $229,718
 $178,038
 $87,414
 29 % 104 %
Audio-PC & Wearables 196,013
 213,496
 250,037
 (8) (15)
Gaming 245,101
 211,911
 186,926
 16
 13
Video Collaboration 89,322
 62,215
 29,058
 44
 114
Home Control 59,075
 68,060
 67,371
 (13) 1
Pointing Devices 492,543
 487,210
 506,884
 1
 (4)
Keyboards & Combos 430,190
 426,117
 415,314
 1
 3
Tablet & Other Accessories 103,886
 140,994
 172,484
 (26) (18)
PC Webcams 98,641
 96,680
 113,791
 2
 (15)
Other (1)
 2,570
 2,725
 37,000
 (6) (93)
Total net retail sales $1,947,059
 $1,887,446
 $1,866,279
 3
 1

(1)Other category includes products that we currently intend to transition out of, or have already transitioned out of, because they are no longer strategic to our business.
Retail Sales(1) Gaming includes streaming services revenue generated by Product Categories:Streamlabs.
Music market:
Mobile Speakers
Our Mobile Speakers category is made up entirely of bluetooth wireless speakers.
During fiscal year 2016, retail sales of Mobile Speakers increased 29%, compared to fiscal year 2015. The sales increased by double digits across all three regions, primarily due to strong demand of UE Boom 2, UE Megaboom and UE Roll bluetooth wireless speakers.
During fiscal year 2015, retail sales of Mobile Speakers increased 104%, compared to fiscal year 2014. The sales increased significantly across all three regions, with a triple digit growth in both Americas and Asia Pacific regions, primarily due to strong demand for the UE BOOM, and experienced triple digit growth in fiscal year 2015 compared to fiscal year 2014. The successful launch of UE MEGABOOM during the fourth quarter of fiscal year 2015 contributed 6% of total Mobile Speakers sales for fiscal year 2015.
Audio-PC & Wearables
Our Audio-PC & Wearables category comprises PC speakers, PC headsets, in-ear headphones and premium wireless audio wearables.
During fiscal year 2016, retail sales of Audio-PC & Wearables decreased 8%, compared to fiscal year 2015. The decrease was primarily due to decreases in sales in PC Speakers and PC Headsets, partially offset slightly by an increase in audio wearables. Retail sales of our headset products decreased 6%. Retail sales of our Wearables products increased 46%.
During fiscal year 2015, retail sales of Audio-PC & Wearables decreased 15%, compared to fiscal year 2014. The decrease was primarily due to decreases in PC Speaker retail sales, reflecting a category that appears to be in structural decline as music consumption continues to migrate to mobile platforms, which benefits our Mobile Speakers product category. Retail sales of our PC Headset products decreased 4%. Retail sales of our Wearables products declined 35%.


Gaming market:
Gaming
Our Gaming category comprises gaming mice, keyboards, headsets, gamepads and steering wheels.
During fiscal year 2016, retail sales of Gaming increased 16%, compared to fiscal year 2015 with double digit growth for gaming keyboards, gaming headsets, and gaming steering wheels. Some of our top revenue generating products for the year include G29 Driving Force Racing Wheel, G920 Driving Force Wheel, G933 Artemis Spectrum, and the G910 Orion Spark gaming keyboard. New products made up 22% of total Gaming revenue for fiscal year 2016.
During fiscal year 2015, retail sales of Gaming increased 13%, compared to fiscal year 2014. This growth was primarily from gaming headsets and gaming mice due to the launch of our new gaming products, including mice, keyboards and headsets. New products made up 12% of total Gaming revenue for fiscal year 2015. Our top revenue-generating Gaming products included the Logitech G502 Proteus Core, the Logitech G27 Racing Wheel, the Logitech G930 Wireless Gaming Headset, and the G430 Cordless Mice.
Video Collaboration market:
Video Collaboration
Our Video Collaboration category primarily(2) Other includes products which combine audio and video and other products that can connect small and medium sized user groups.
During fiscal year 2016, retail sales of Video Collaboration increased 44%, compared to fiscal year 2015. The sales increase in this category was primarily driven by the success of ConferenceCam Connect, PTZ Pro Camera, and Webcam C930e.
During fiscal year 2015, retail sales of Video Collaboration increased 114%, compared to fiscal year 2014. The sales increased significantly across all products in this category, primarily driven by the success of the Logitech ConferenceCam CC3000e and Logitech ConferenceCam C930e.
Home market:
Home Control
Our Home Control category includes our Harmony remotes and Harmony Home Control.
During fiscal year 2016, retail sales of Home Control decreased 13%, compared to fiscal year 2015. The decline was primarily driven by the sales decrease of our mid-range products. New products contributed 24% of total retail sales of Home Control for fiscal year 2016.
During fiscal year 2015, retail sales of Home Control increased 1%, compared to fiscal year 2014. The increase in Home Control was primarily concentrated in our mid-range and low-end products, partially offset by decreases in our high-end products. New products contributed 17% of total retail sales of Home Control for fiscal year 2015.Smart Home.
Creativity and& Productivity market:
Pointing Devices
Our Pointing Devices category comprises PCPC- and Mac-related mice including trackballs, touchpads and presenters.presentation tools.
During fiscal year 2016, retail sales of2023, Pointing Devices increased 1%, in comparison to fiscal year 2015. The growth in this category was driven by the MX Master Wireless Mouse. New products contributed approximately 8% of total retail sales of Pointing Devices for fiscal year 2016.
During fiscal year 2015, retail sales of Pointing Devices decreased 4%7%, compared to fiscal year 2014. The2022, primarily driven by the decrease in retail sales was primarily due to the continued weakness in the global PC market. The decrease was primarily from our high-end product offerings, which decreased 12%, followed by our low-end product offerings, which decreased 5%, partially offset by our mid-range product offerings, which increased 1%. Retail sales of corded mice decreased 4%, and retail sales of cordless and corded mice, decreased 5%.

particularly in our low end products.
Keyboards & Combos
Our Keyboards & Combos category comprises PC keyboards and keyboard/mice combo products.
During fiscal year 2016, retail sales of2023, Keyboards & Combos increased 1%sales decreased 14%, compared to fiscal year 2015. The sales increase was2022, primarily driven mainly by cordless keyboards which grew 17%. Our best selling productsthe decrease in this category include the Wireless MK270 and MK520 Wireless combos.
During fiscal year 2015, retail sales of Keyboards & Combos increased 3%, compared to fiscal year 2014. The sales increase was primarily due to sales increaseour cordless combos and corded PC keyboards, particularly in our corded and cordless combos. Retail sales of corded and cordless combos increased 19% and 6%, respectively. Our best selling products in this category were the Logitech Wireless MK270 and MK520 Wireless combos, which feature powerful and reliable wireless connections and plug-and-play simplicity. Retail sales of corded and cordless keyboards decreased 9% and 7%, respectively.
Tablet & Other Accessories
Our Tablet & Other Accessories category comprises keyboards and covers for tablets and smartphones as well as other accessories for mobile devices.
During fiscal year 2016, retail sales of Tablet & Other Accessories decreased 26%, compared to fiscal year 2015. The reduction in sales reflects the combination of a declining market for iPad shipments, partially offset by the new product introduction of Create backlit tablet keyboard case for iPad Pro.
During fiscal year 2015, retail sales of Tablet & Other Accessories decreased 18%, compared to fiscal year 2014. The reduction in sales, primarily from tablet keyboards, reflects the combination of a declining demand for the iPad tablet platform and increased competition, partially offset by sales growth with our tablet covers for the iPads.low end products.
PC Webcams
Our PC Webcams category comprises PC-based webcams targeted primarily at consumers.consumers, including streaming cameras.
During fiscal year 2016, retail sales of2023, PC Webcams increased 2%sales decreased 44%, compared to fiscal year 2015. The growth was2022, primarily driven by Asia Pacific, withthe decrease in sales nearly doubling.of our HD Pro Webcam C920, 1080p Pro Stream Webcam, and Webcam C260.
Tablet & Other Accessories
Our Tablet & Other Accessories category primarily comprises tablet keyboards and styluses.
During fiscal year 2015, retail2023, Tablet & Other Accessories sales of PC Webcams decreased 15%18%, compared to fiscal year 2014. The weak2022, primarily driven by the decrease in sales reflect the ongoing structural decline of the consumer webcam market.most of our products, partially offset by increases in sales of our Rugged Combo 3 Touch.
Other:Gaming market:
ThisGaming
Our Gaming category comprises a variety of products that we currently intend to transition out of, or have already transitioned out of, because they are no longer strategic to our business. Products currently included in this category include TV camera, Digital Video Security, TVgaming mice, keyboards, headsets, gamepads, steering wheels, simulation controllers, console gaming headsets, and home speakers, Google TV products, Keyboard/Desktop accessories, and music docks.Streamlabs services.
During fiscal year 2016, retail2023, Gaming sales of this category decreased 6%17%, compared to fiscal year 2015. 2022, primarily driven by the decrease in sales of gaming mice, keyboards, and headsets.
Logitech International S.A. | Fiscal 2023 Form 10-K | 41

Video Collaboration market:
Video Collaboration
Our Video Collaboration category includes Logitech’s conference room cameras, which combine affordable enterprise-quality audio and high definition 4K video to bring video conferencing to businesses of any size, as well as webcams and headsets that turn any desktop into an instant collaboration space.
During fiscal year 2015, retail2023, Video Collaboration sales of this category decreased 93%11%, compared to fiscal year 2014.2022, primarily due to the decrease in sales of webcams, partially offset by an increase in sales of conference room cameras and docks. Sales for Video Collaboration for fiscal year 2023 were negatively impacted by a slowdown in enterprise spending.
Music market:
Mobile Speakers
Our Mobile Speakers category is made up entirely of Bluetooth wireless speakers.
During fiscal year 2023, Mobile Speakers sales decreased 25%, compared to fiscal year 2022, primarily due to a decrease in sales of most of our Mobile Speaker sub-categories, partially offset by the sales of our Ultimate Ears Wonderboom 3 mini speakers, introduced in the second quarter of fiscal year 2023.
Audio & Wearables
Our Audio & Wearables category comprises PC speakers, PC headsets, in-ear headphones, premium wireless earbuds and studio-quality Blue Microphones for professionals and consumers.
During fiscal year 2023, Audio & Wearables sales decreased 32%, compared to fiscal year 2022, primarily due to the decrease in sales of almost all sub-categories.
Gross Profit
Gross profit for fiscal years 2016, 20152023 and 20142022 was as follows (Dollars in thousands):
 Years Ended March 31, Change Years Ended March 31,
 2016 2015 2014 2016 vs. 2015 2015 vs. 2014 20232022Change
Net sales $2,018,100
 $2,004,908
 $2,008,028
 1 % — %Net sales$4,538,818 $5,481,101 (17.2)%
Cost of goods sold 1,337,053
 1,299,451
 1,346,489
 3
 (3)
Gross profit $681,047
 $705,457
 $661,539
 (3) 7
Gross profit$1,719,515 $2,263,006 (24.0)%
Gross margin 33.7% 35.2% 32.9% 

 

Gross margin37.9 %41.3 %
Gross profit consists of net sales, less cost of goods sold which(which includes materials, direct labor and related overhead costs, costs of manufacturing facilities, royalties, costs of purchasing components from outside suppliers, distribution costs, warranty costs, customer support costs, shipping and handling cost,costs, outside processing costs and write-down of inventoriesinventories), and amortization of intangible assets.

Gross margin is gross profit as a percentage of net sales.decreased by 340 basis points to 37.9% during fiscal year 2023, compared to fiscal year 2022. The decrease in gross margin during fiscal year 2016, comparedwas primarily due to fiscal year 2015, is primarily driven byinflationary pressure on costs and unfavorable fluctuationsimpacts from changes in currency exchange rates, partially offset by sales price increases and savings from supply chain efficiencies related to freight.a reduction in our use of expedited shipping.
The increase in gross margin during fiscal year 2015, compared to fiscal year 2014, primarily resulted from an improvement attributable to cost reduction initiatives across the Pointing Devices, Keyboards & Combos and Mobile Speakers product categories, an improvement attributable to exiting non-strategic product categories, an improvement attributable to a $5.2 million discontinued products write-off in fiscal year 2014, and an improvement attributable to lower inventory reserves in fiscal year 2015 that were partially offset by a higher percentage
Logitech International S.A. | Fiscal 2023 Form 10-K | 42

Table of air shipments in fiscal year 2015.Contents
Operating Expenses
Operating expenses for fiscal years 2016, 20152023 and 20142022 were as follows (Dollars in thousands):
 Years Ended March 31,
 20232022
Marketing and selling$809,182 $1,025,899 
% of sales17.8 %18.7 %
Research and development280,796 291,844 
% of sales6.2 %5.3 %
General and administrative124,652 148,648 
% of sales2.7 %2.7 %
Amortization of intangible assets and acquisition-related costs11,843 16,947 
% of sales0.3 %0.3 %
Impairment of intangible assets— 7,000 
% of salesN/A0.1 %
Change in fair value of contingent consideration for business acquisition— (3,509)
% of salesN/A(0.1)%
Restructuring charges, net34,573 2,165 
% of sales0.8 %— %
Total operating expenses$1,261,046 $1,488,994 
% of sales27.8 %27.2 %
  Years Ended March 31, Change
  2016 2015 2014 2016 vs. 2015 2015 vs. 2014
Marketing and selling $319,015
 $321,749
 $322,707
 (1)% — %
% of net sales 15.8% 16.0 % 16.1%  
  
Research and development 113,624
 108,306
 112,446
 5
 (4)
% of net sales 5.6% 5.4 % 5.6%  
  
General and administrative 101,548
 125,995
 112,689
 (19) 12
% of net sales 5.0% 6.3 % 5.6%  
  
Restructuring charges (Credits), net 17,802
 (4,777) 8,001
 (473) (160)
% of net sales 0.9% (0.2)% 0.4%  
  
Total operating expenses $551,989
 $551,273 $555,843
 —
 (1)
% of net sales 27.4% 27.5 % 27.7%  
  
Total operating expenses during fiscal year 2016 remained relatively flat, compared to fiscal year 2015, with increase in restructuring charges due to restructuring charges of $17.8 million in fiscal year 2016 compared to a restructuring credit of $4.8 million in fiscal year 2015, and increase in research and development expense partially offset by the decrease in general and administrative expense. Marketing and selling expenses were relatively flat.
The decrease in total operating expenses during fiscal year 2015,2023, compared to fiscal year 2014,2022, was mainly due to adecreases in marketing and selling expenses, partially offset by an increase in restructuring credit of $4.8 million during fiscal year 2015 resulting from partial lease termination of our Silicon Valley campus, which was previously vacated and under a restructuring plan during fiscal year 2014, as opposed to a restructuring charge of $8.0 million during fiscal year 2014.charges.
Marketing and Selling
Marketing and selling expenses consist of personnel and related overhead costs, corporate and product marketing, promotions, advertising, trade shows, customer and technical support for customer experiences and facilities costs.
During fiscal year 2016,2023, marketing and selling expenses decreased by 1%,$216.7 million, compared to fiscal year 2015. The decrease was 2022, primarily due to currency impact, offsetdriven by investmentsour reduction in growth markets.
During fiscal year 2015,third-party marketing and selling expenses remained flat, compared to fiscal year 2014.advertising spend.
Research and Development
Research and development expenses consist of personnel and related overhead costs for contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all associated with the design and development of new products and enhancements of existing products.
During fiscal year 2016,2023, research and development expenses increased by 5%,expenses decreased $11.0 million, compared to fiscal year 2015. The increase was2022, primarily due to $4.6 milliondriven by lower personnel-related costs, partially offset by higher personnel-related expenses and $0.8 million higher consulting cost related to continuing investment in enhancement of existing products and development of new products.

During fiscal year 2015, researchoutsourcing expenses. Research and development expenses decreased 4%, compared toas a percentage of sales increased from 5.3% in fiscal year 2014. The decrease was primarily due2022 to a $1.5 million decrease6.2% in outsourcing research and development activities during fiscal year 2015, and $1.5 million savings from depreciation and amortization expense.2023 reflecting our continued investment in innovation.
General and Administrative
General and administrative expenses consist primarily of personnel and related overhead, information technology, and facilities costs for the infrastructure functions such as finance, information systems, executives, human resources and legal functions.legal.
During fiscal year 2016,2023, general and administrative expenses decreased by 19%,$24.0 million, compared to fiscal year 2015. 2022, primarily driven by lower personnel-related costs.
Logitech International S.A. | Fiscal 2023 Form 10-K | 43

Table of Contents
Amortization of Intangible Assets and Acquisition-Related Costs
Amortization of intangible assets included in operating expense and acquisition-related costs during fiscal years 2023 and 2022 were as follows (in thousands):
 Years Ended March 31,
 20232022
Amortization of intangible assets$11,542 $16,156 
Acquisition-related costs301 791 
Total$11,843 $16,947 
Amortization of intangible assets consists of amortization of acquired intangible assets, including customer relationships and trademarks and trade names. Acquisition-related costs include legal expense, due diligence costs, and other professional costs incurred for business acquisitions.
The decrease in amortization of intangible assets and acquisition-related costs from fiscal year 2022 to 2023 was primarily due to reductioncertain acquired intangible assets becoming fully amortized and the write-off of $19.1Jaybird intangible assets in fiscal year 2022.
Impairment of Intangible Assets

During fiscal year 2022, we recognized a pre-tax impairment charge of $7.0 million, related to the Audit Committee independent investigation and related expenses incurred in fiscal year 2015 and a $2.5 million decrease in personnel-related cost.
During fiscal year 2015, general and administrative expense increased 12% compared to fiscal year 2014. The increase was primarilyintangibles acquired as part of the Jaybird acquisition due to $23.7 million in expense relatedour decision to the Audit Committee independent investigation and related expenses, partially offset by infrastructure cost savings such as a $6.8 million decrease in information technology costs, including third party vendor cost, and a $5.2 million decrease in facility expense as a result of the consolidation of properties.discontinue Jaybird-branded products.

Restructuring Charges (Credits), Net
The following table summarizes restructuring-related activities during the fiscal years 2016 and 2015 from continuing operations (in thousands):
  Restructuring - Continuing Operations
  Termination
Benefits		 Lease Exit
Costs		 Other Total
Accrual balance at March 31, 2014 $—
 $7,309
 $—
 $7,309
Credits, net —
 (4,777) —
 (4,777)
Cash payments —
 (1,578) —
 (1,578)
Accrual balance at March 31, 2015 —
 954
 —
 954
Charges, net 17,280
 337
 185
 17,802
Cash payments (11,373) (1,166) (185) (12,724)
Accrual balance at March 31, 2016 $5,907
 $125
 $—
 $6,032
The following table summarizes restructuring-related activities during the fiscal years 2016 and 2015 from discontinued operations (in thousands):
  Restructuring - Discontinued Operations
  Termination
Benefits		 Lease Exit
Costs		 Other Total
Accrual balance at March 31, 2014 $142
 $110
 $—
 $252
Charges (86) (25) —
 (111)
Cash payments (56) —
 —
 (56)
Accrual balance at March 31, 2015 —
 85
 —
 85
Charges, net 7,095
 —
 805
 7,900
Cash payments (6,460) (14) (805) (7,279)
Adjustment as a result of disposition of discontinued operations (267) (71) —
 (338)
Accrual balance at March 31, 2016 $368
 $—
 $—
 $368

During the firstsecond quarter of fiscal year 2016,2023, we implementedinitiated a restructuring plan to exitrealign our business group and engineering structure with our go-to-market strategy to more effectively compete within the OEM business, reorganize Lifesizeenterprise market and to sharpen its focus on its cloud-based offering, and streamline our overall cost structure, including overhead and infrastructure cost reductions with a targeted resource realignment. Restructuring charges incurred during the year ended March 31, 2016 under this plan primarily consisted of severance and other ongoing

and one-time termination benefits. Charges and other costs related to the workforce reduction and structure realignment are presented as restructuring charges in the Consolidated Statements of Operations. On a total company basis, including the Lifesize video conferencing business as reported in discontinued operations, we have incurred $25.5 million under this restructuring plan, including $24.4 million for cash severance and other personnel costs. We have paid $19.0 million as of March 31, 2016, on a total company basis. We substantially completed this restructuring plan by the fourth quarter of fiscal year 2016, subject to the payment of accrued balance as noted above.
better serve end-users. During the fourth quarter of fiscal year 2013,2023, we implemented a restructuring planundertook further actions to align itsremove organization layers as well as streamline our marketing organization to its strategic priorities of increasing focus on mobility products, improving profitability in PC-related products and enhancing global operational efficiencies.increase efficiency. As part of thisa result, we recorded pre-tax restructuring plan, we reduced our worldwide non-direct labor workforce. Restructuring charges under this plantotaling $34.6 million primarily consisted ofrelated to employee severance and other one-time termination benefits. DuringWe expect to substantially complete these restructuring activities within the next twelve months.

The restructuring charges of $2.2 million for fiscal year 2015, we2022, were recorded a $4.9 million restructuring credit on a total company basis, primarily as a result of partial termination of our lease agreement fordecision to exit Jaybird-branded products during the Silicon Valley campus, which was previously vacated under the restructuring plan during fiscal year 2014. We substantially completed this restructuring plan by the fourththird quarter of fiscal year 2014.2022. This restructuring plan has been substantially completed.

See Note 16 to our consolidated financial statements for additional information.

Interest Income (Expense), Net
Interest income and expense for fiscal years 2016, 20152023 and 2014 were2022 was as follows (in thousands):
 Years Ended March 31,
 20232022
Interest Income$18,331 $1,246 
  Years Ended March 31,
  2016 2015 2014
Interest income $790
 $1,197
 $1,797
Interest expense —
 —
 (2,228)
  $790
 $1,197
 $(431)
Interest expense decreased duringWe invest in highly liquid instruments with an original maturity of three months or less at the date of purchase, which are classified as cash equivalents. The increase in interest income for fiscal year 2015,2023, compared to fiscal year 2014. The decrease2022, was primarily due to the terminationdriven by the increase in interest rates.
Logitech International S.A. | Fiscal 2023 Form 10-K | 44

Table of our $250 million Senior Revolving Credit Facility during fiscal year 2014. There were no new borrowings since then.Contents
Other Income (Expense), Net
Other income and expense(expense), net for fiscal years 2016, 20152023 and 2014 were2022 was as follows (in thousands):
  Years Ended March 31,
  2016 2015 2014
Investment income (loss) related to deferred compensation plan $(364) $1,055
 $1,487
Impairment of investments —
 (2,298) (624)
Currency exchange gain (loss), net 2,110
 (1,175) (62)
Other (122) 120
 1,238
  $1,624
 $(2,298) $2,039
 Years Ended March 31,
 20232022
Investment gain (loss) related to the deferred compensation plan$(1,961)$1,231 
Currency exchange loss, net(7,337)(4,604)
Loss on investments, net(14,073)(1,683)
Non-service cost net pension income (expense) and other10,093 5,616 
Total$(13,278)$560 
Investment incomegain (loss) related to the deferred compensation plan for fiscal years 2016, 20152023 and 20142022 represents earnings, gains, and losses on trading investmentsmarketable securities related to a deferred compensation plan offered by one of our subsidiaries. The decrease in investment income for fiscal year 2023 compared to fiscal year 2022 primarily relates to the change in market performance of the underlying securities.
The $2.3 million and $0.6 million investment impairment charges in fiscal years 2015 and 2014, respectively, primarily resulted from the write-down of investments in privately-held companies.
Currency exchange gains or losses relateloss, net, relates to balances denominated in currencies other than the functional currency in our subsidiaries, as well as to the sale of currencies, and to gains or losses recognized on foreign currency exchange forward contracts. We do not speculate in currency positions, but we are alert to opportunities to maximize foreigncurrency exchange gains and minimize foreign currency exchange losses. The loss for fiscal year 2023 was primarily related to the weakening of the Brazilian Real and Australian Dollar against U.S. Dollar. The loss for fiscal year 2022 was primarily related to the strengthening of the Chinese Renminbi against the U.S. Dollar.


Loss on investments, net, includes unrealized gain (loss) from the fair value change of investment, gain (loss) on equity-method investments and impairment of investments during the periods presented, as applicable. The loss on investments, net for fiscal year 2023 was primarily due to the impairment charge related to one of our equity method investments, partially offset by the unrealized gain related to one of our equity investments without readily determinable fair value resulting from observable price changes. See Note 9 to our consolidated financial statements for additional information.
Non-service cost net pension income (expense) and other increased in fiscal year 2023, compared to fiscal year 2022, primarily due to the curtailment gain recognized in fiscal year 2023 for one of our defined benefit plans as a result of the restructuring actions undertaken by the Company (see Notes 5 and 16 to our consolidated financial statements).
Provision for Income Taxes
The provision for income taxes and the effective income tax raterates for fiscal years 2016, 20152023 and 20142022 were as follows (in(Dollars in thousands):
 Years Ended March 31, Years Ended March 31,
 2016 2015 2014 20232022
Provision for income taxes $3,110
 $4,654
 $1,313
Provision for income taxes$98,947 $131,305 
Effective income tax rate 2.4% 3.0% 1.2%Effective income tax rate21.3 %16.9 %
The changeschange in the effective income tax rate between fiscal years 20162023 and 2015 and between fiscal years 2015 and 2014 were2022 was primarily due to the mix of income and losses in the various tax jurisdictions in which we operate. Further, there was a
We recognized excess tax benefits from share-based payments, net of shortfalls of $1.3 million and $16.3 million in the United States in fiscal years 2023 and 2022, respectively, and recognized income tax benefit of $16.1 million in fiscal year 2016 related tofrom the reversal of uncertain tax positions resulting from the expiration of the statutes of limitations.limitations in the amount of $4.3 million and $4.9 million in fiscal years 2023 and 2022, respectively. In fiscal year 2015, there was aaddition, we recognized income tax benefit of $15.4$3.7 million related tofrom the reversal of uncertain tax positions resulting from the expirationan effective settlement of the statutes of limitations and the closure ofa foreign income tax examinationaudit in the State of California of the United States. In fiscal year 2014, there was a tax benefit of $14.3 million related to the reversal of uncertain tax positions resulting from the expiration of the statutes of limitations.2022.
On December 18, 2015, the enactment of the Protecting Americans from Tax Hikes Act of 2015 in the United States extended the federal research and development tax credit permanently which had previously expired on December 31, 2014. The provision for income taxes for fiscal year ended March 31, 2016 reflected a $1.5 million tax benefit as a result of the extension of the tax credit.
As of March 31, 20162023 and March 31, 2015,2022, the total amountsamount of unrecognized tax benefits due to uncertain tax positions were $69.9was $186.8 million and $79.0$176.0 million, respectively, all of which would affect the effective income tax ratesrate if recognized.
Logitech International S.A. | Fiscal 2023 Form 10-K | 45

Table of Contents
As of March 31, 2016,2023 and 2022, we had $59.7$106.4 million and $83.4 million, respectively, in non-current income taxes payable and $0.1 million in current income taxes payable, including interest and penalties, related to our income tax liability for uncertain tax positions. As of March 31, 2015, we had $72.1We recognized $2.7 million in non-current income taxes payable and $0.1$1.5 million, in current income taxes payable. We continue to recognize interest and penalties related to unrecognized tax positions in income tax expense. We recognized $0.3 million, $0.8 million and $1.1 million in interest and penalties in income tax expense during fiscal years 2016, 20152023 and 2014,2022, respectively. As of March 31, 2016, 20152023 and 2014,2022, we had $6.1 million and $3.6 million, $4.9 million and $5.6 millionrespectively, of accrued interest and penalties related to uncertain tax positions, respectively.positions.
We file Swiss and foreign tax returns. We received final tax assessments in Switzerland through fiscal year 2013.2019. For other material foreign jurisdictions such as the United States and China, we are generally not subject to tax examinations for years prior to fiscal year 2012.2020 and calendar year 2020, respectively. In the United States, the federal and state tax agencies have the authority to examine periods prior to fiscal year 2020, to the extent allowed by law, where tax attributes were generated, carried forward, and being utilized in subsequent years. We are under examination and have received assessment notices in foreign tax jurisdictions. If the examinations are resolved unfavorably, there is a possibility that they may have a material negative impact on our results of operations.
Pursuant to the Tax Cuts and Jobs Act of 2017, research and development expenses are required to be capitalized and amortized over five years for U.S. tax purposes if the research and development activities are performed in the U.S. effective for tax year beginning after December 31, 2021. The provision was effective for us beginning in fiscal year 2023. However, the provision which delays the deductibility of research and development expenses is not applicable to our existing research and development activities in the U.S. We evaluate our business activities regularly should the provision become applicable.
Liquidity and Capital Resources
Cash Balances, Available Borrowings, and Capital Resources
AtAs of March 31, 2016,2023, we had cash and cash equivalents of $519.2$1,149.0 million, compared with $533.4$1,328.7 million atas of March 31, 2015.2022. Our cash and cash equivalents consist of bank demand deposits and short-term time deposits, of which 74%which 78% is held by our Swiss-based entitiesin Switzerland and 17%12% is held by our subsidiaries in China (including Hong Kong and China.Kong). We do not expect to incur any material adverse tax impact except for what has already been recognized, or to be significantly inhibited by any country in which we do business from the repatriation of funds to Switzerland, our home domicile. country of domicile.
At MarchAs of March 31, 2016,2023, our working capital was $511.3$1,555.1 million, compared with working capital of $563.8to $1,651.8 million at March 31, 2015, excluding working capital from discontinued operations. The decrease in working capital over the prior year was primarily due to lower balances of cash and cash equivalents, inventories, accounts receivables, net, and deferred tax assets which were reclassified to non-current assets as of March 31, 2016 pursuant to the adoption of ASU 2015-17, partially offset2022. The decrease was primarily driven by lower accounts payable at March 31, 2016.
During fiscal year 2016, we generated $183.1 millioninventories, lower cash balances resulting from operating activities. Our main sourcesshare repurchases and payments of operating cash flows were from net income after adding back non-cash expenses of depreciation, amortization,dividends, and share-based compensation expense, and from decrease in inventories andlower accounts receivable, net, partially offset

by decreasedecreases in accounts payable and a decrease in accrued and other liabilities. Net cash used in investing activities was $60.7 million, primarily for purchase of property, plant, and equipment of $56.6 million, and investments in privately held companies of $2.4 million, and payments for divestiture of discontinued operations net of cash sold of $1.4 million. Net cash used in financing activities was $141.7 million, primarily for the $85.9 million cash dividends paid during the year, $70.4 million purchase of treasury shares and $7.2 million tax withholdings related to net share settlements of restricted stock units, partially offset by $19.8 million proceeds received from the sale of shares upon exercise of options and purchase rights.
We had several uncommitted, unsecured bank lines of credit aggregating to $45.7$181.3 million as of March 31, 2016.2023. There are no financial covenants under these lines of credit with which we must comply. As of March 31, 2016,2023, we had outstanding bank guarantees of $19.7$13.6 million under these lines of credit. There are no financial covenants under these credit lines.
The following table summarizes our Consolidated Statements of Cash Flows (in thousands):
  Years Ended March 31,
  2016 2015 2014
Net cash provided by operating activities $183,111
 $178,632
 $205,421
Net cash used in investing activities (60,690) (48,289) (46,803)
Net cash used in financing activities (141,669) (48,854) (22,681)
Effect of exchange rate changes on cash and cash equivalents 1,405
 (13,863) (349)
Net increase (decrease) in cash and cash equivalents $(17,843) $67,626
 $135,588
Logitech International S.A. | Fiscal 2023 Form 10-K | 46

The following amounts reflected in the table above are from discontinued operations:
Depreciation $2,207
 $2,562
 $3,402
Amortization of other intangible assets $1,438
 $7,598
 $15,369
Share-based compensation $332
 $1,634
 $2,318
Purchases of property, plant and equipment $1,431
 $3,598
 $4,233
Cash and cash equivalents, beginning of the period $3,659
 $1,894
 $2,326
Cash and cash equivalents, end of the period $—
 $3,659
 $1,894
Table of Contents
Cash Flow from Operating Activities
The following table presents selected financial information and statistics for fiscal years 2016, 2015 and 2014 (dollars in thousands):
  March 31,
  2016 2015 2014
Accounts receivable, net $142,778
 $167,196
 $166,877
Inventories 228,786
 255,980
 212,599
Days sales in accounts receivable ("DSO")(Days)(1) 30
 34
 33
Inventory turnover ("ITO")(x)(2) 5.0
 4.7
 6.0


(1)DSO is determined using ending accounts receivable as of the most recent quarter-end and net sales for the most recent quarter.
(2)ITO is determined using ending inventories and annualized cost of goods sold (based on the most recent quarterly cost of goods sold).
Inventory turnover as of March 31, 20162023 and 2022 (Dollars in thousands):
 March 31,
 20232022
Accounts receivable, net$630,382 $675,604 
Accounts payable$406,968 $636,306 
Inventories$682,893 $933,124 
Days sales in accounts receivable (DSO)(Days)(1)
59 49 
Days accounts payable outstanding (DPO) (Days)(2)
59 78 
Inventory turnover (ITO)(x)(3)
3.6 3.2 
(1)DSO is determined using ending accounts receivable, net as of the most recent quarter-end and sales for the most recent quarter.
(2)DPO is determined using ending accounts payable as of the most recent quarter-end and cost of goods sold for the most recent quarter.
(3)ITO is determined using ending inventories and annualized cost of goods sold (based on the most recent quarterly cost of goods sold).
DSO as of March 31, 2023 increased by 10 days to 59 days, as compared to 49 days as of March 31, 2022, primarily due to lower revenues resulting from softened demand, partially offset by timing of sales within the quarter.
DPO as of March 31, 2023 decreased 19 days, compared to March 31, 2015. The increase was2022, primarily due to our exit from the OEM business at the end of the quarter ended December 31, 2015a reduction in inventory purchases and with no OEM inventorieslower marketing spend, partially offset by softened demand.
ITO as of March 31, 2016.

Inventory turnover2023 increased 0.4, compared to March 31, 2022, primarily due to a lower inventory balance as of March 31, 2015 decreased compared to March 31, 2014. The decrease was primarily due to higher inventory levels due to the port strike on the west coast of the United States and change in shipping strategy from air to ocean during the fourth quarter of fiscal year 2015.2023, partially offset by softened demand.
If we are not successful in launching and phasing in our new products, launched during the current fiscal year,or market competition increases, or we are not able to sell the new products at the prices planned, it could have a material impact on our revenue,sales, gross profit margin, operating results including operating cash flow, and inventory turnover in the future.
Cash Flow from Investing Activities
The following table presentssummarizes our consolidated statement of cash flow from investing activitiesflows for fiscal years 2016, 2015 and 2014 (dollarsthe year ended March 31, 2023 (Dollars in thousands):
Year ended March 31, 2023
Net cash provided by operating activities$534,010 
Net cash used in investing activities(105,730)
Net cash used in financing activities(583,353)
Effect of exchange rate changes on cash and cash equivalents(24,620)
Net decrease in cash and cash equivalents$(179,693)
  Years Ended March 31,
  2016 2015 2014
Purchases of property, plant and equipment $(56,615) $(45,253) $(46,658)
Investment in privately held companies (2,419) (2,550) (300)
Payments for divestiture of discontinued operations, net of cash sold (1,395) —
 —
Changes in restricted cash (715) —
 —
Acquisitions, net of cash acquired —
 (926) (650)
Proceeds from return of investment from strategic investments —
 —
 261
Purchase of trading investments (9,619) (5,034) (8,450)
Proceeds from sales of trading investments 10,073
 5,474
 8,994
  $(60,690) $(48,289) $(46,803)
For fiscal year 2023, net cash provided by operating activities was $534.0 million resulting from net income of 364.6 million, a favorable impact from adding back non-cash expenses totaling $213.1 million, and an unfavorable net change in operating assets and liabilities of $43.6 million. Non-cash expenses were primarily related to depreciation and amortization, share-based compensation expense, and deferred income taxes. The decrease in accounts receivable, net was primarily driven by lower sales, partially offset by the timing of sales within the quarter. The decrease in inventories was primarily driven by a reduction in inventory purchases to align with lower demand. The decrease in accounts payable was primarily driven by the reduction in inventory purchases. The decrease in accrued and other liabilities was primarily driven by a lower annual bonus accrual and lower marketing spend.
For fiscal year 2023, net cash used in investing activities was $105.7 million, primarily due to $92.4 million purchases of property, plant, and equipment. Our expenditures for property, plant and equipment during fiscal year 2016, 2015 and 20142023 were primarily for leaseholdtooling and equipment, building improvements, and computer hardware and software, tooling and equipment.software.
Our expenditures for property, plant and equipment increased duringFor fiscal year 2016, compared2023, net cash used in financing activities was $583.4 million, resulting from repurchases of our registered shares of $418.3 million, payments of cash dividends of $158.7 million, and tax withholdings related to fiscal year 2015, mainly due to the building
Logitech International S.A. | Fiscal 2023 Form 10-K | 47

Table of production lines to accommodate the in-house manufacturingContents
net share settlements of certain products compared withrestricted stock units of $29.2 million, partially offset by proceeds from exercise of stock options and purchase from third parties in the prior period to align with our goal to achieve cost savings. rights of $28.8 million.
During fiscal year 2015, purchases of property, plant and equipment remained relatively stable compared to fiscal year 2014.
During fiscal year 2016, we made a $1.5 million strategic investment in one privately held company and $0.9 million investment in a limited partnership with a private investment fund. During fiscal year 2015, we made a $2.6 million strategic investment in one privately held company and acquired one privately held company for $0.9 million. During fiscal year 2014, we acquired one privately held company for $0.7 million.
During fiscal year 2016, the net payments for divestiture of discontinued operations were $1.4 million, and there was $0.7 million for cash outflow to an escrow account for purchase of a domain name.
The purchases and sales of trading investments during fiscal years 2016, 2015 and 2014 represent mutual fund activity directed by participants in a deferred compensation plan offered by one of our subsidiaries. The mutual funds are held by a Rabbi Trust.

Cash Flow from Financing Activities
The following table presents cash flow from financing activities for fiscal years 2016, 2015 and 2014 (dollars in thousands):
  Years Ended March 31,
  2016 2015 2014
Payment of cash dividends $(85,915) $(43,767) $(36,123)
Purchases of treasury shares (70,358) (1,663) —
Contingent consideration related to prior acquisition —
 (100) —
Repurchase of ESPP awards —
 (1,078) —
Proceeds from sales of shares upon exercise of options and purchase rights 19,767
 4,138
 16,914
Tax withholdings related to net share settlements of restricted stock units (7,247) (9,215) (5,718)
Excess tax benefits from share-based compensation 2,084
 2,831
 2,246
  $(141,669) $(48,854) $(22,681)
Translation effect of exchange rate changes on cash and cash equivalents
During fiscal year 2016,2023, there was a $1.4$24.6 million loss from currency translation exchange rate effect on cash and cash equivalents, compared to a $13.9 million currency translation exchange rate effect during fiscal year 2015, and a $0.3 million currency translation exchange rate effect during fiscal year 2014. Higher currency translation exchange effect during fiscal year 2015 was primarily due to the 22% weakeningexchange rate fluctuations of the Euro, Swiss Franc, Chinese Renminbi, and Australian Dollar versus the U.SU.S. Dollar during fiscal year 2015, which had an adverse impact onand timing of our cash and cash equivalents balances in subsidiaries with functional currency as Euro.transactions over the period.
Cash Outlook
Our principal sources of liquidity are our cash and cash equivalents, cash flow generated from operations and, to a much lesser extent, capital markets and borrowings. Our future working capital requirements and capital expenditures may increase to support investmentinvestments in product innovations and growth opportunities or to acquire or invest in complementary businesses, products, services, and technologies. Market volatility driven by the current macroeconomic and geopolitical environment may increase our costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity.
In March 2015,May 2023, the Board of Directors recommended that we announced a plan to pay $250 million in cumulativecash dividends for fiscal year 2015 through2023 of CHF 1.06 per share (approximately $1.16 per share based on the exchange rate on March 31, 2023). Based on our shares outstanding, net of treasury shares, as of March 31, 2023 (159,343,273 shares), this would result in an aggregate gross dividend of approximately CHF 168.9 million (approximately $184.2 million based on the exchange rate on March 31, 2023). In fiscal year 2017. During fiscal year 2016,2023, we paid a cash dividend of CHF 83.10.96 per share, or CHF 156.1 million (U.S. Dollar amount of $85.9$158.7 million based on the exchange rate on the date of payment) out of fiscal year 2022 retained earnings. In fiscal year 2022, we paid a cash dividend of CHF 0.87 per share, or CHF 147.0 million (U.S. Dollar amount of $159.4 million) out of fiscal year 2021 retained earnings. DuringIn fiscal year 2015,2021, we paid a cash dividend of CHF 43.10.79 per share, or CHF 134.0 million (U.S. Dollar amount of $43.8$146.7 million) out of fiscal year 2020 retained earnings.
In March 2014,May 2020, our Board of Directors approved athe 2020 share buybackrepurchase program, which authorizesauthorized us to invest up to $250.0 million to purchase our own shares. OurIn April 2021, our Board of Directors approved an increase of $750.0 million to the 2020 share buybackrepurchase program, to an aggregate amount of $1.0 billion. The Swiss Takeover Board approved this increase and it became effective on May 21, 2021. In July 2022, our Board of Directors approved an increase of $500 million to the 2020 share repurchase program, to an aggregate amount of up to $1.5 billion to purchase up to 17.3 million of Logitech shares. The Swiss Takeover Board approved this increase and it became effective on August 19, 2022. As of March 31, 2023, $505.8 million was available for repurchase under the 2020 repurchase program.
Although we enter into trading plans for systematic repurchases (e.g., 10b5-1 trading plans) from time to time, our share repurchase program provides us with the opportunity to make opportunistic repurchases during periods of favorable market conditions and is expected to remain in effect for a period of three years.years through July 27, 2023. Shares may be repurchased from time to time on the open market, through block trades or otherwise. PurchasesOpportunistic purchases may be started or stopped at any time without prior notice depending on market conditions and other factors. During fiscal years 2016 and 2015, 5.0 million and 0.1 million shares were repurchased for $70.4 million and $1.7 million, respectively, under this program.
On April 12, 2016, Logitech Europe S.A., one of our wholly-owned subsidiaries, JayBird, LLC, a Utah limited liability company (“Jaybird”), the unit holders of Jaybird and Judd Armstrong (as the Sellers’ Representative under the Securities Purchase Agreement) entered into a securities purchase agreement. On April 20, 2016, we acquired all of the equity interests of Jaybird in exchange for approximately $50 million in cash, with the potential of an additional earn-out of up to $45 million based on achievement of net revenue growth targets over two years.
Our other contractual obligations and commitments that require cash are described in the following sections.
For over ten years, we have generated positive cash flows from our operating activities, including cash from operations of $183.1$534.0 million $178.6 million and $205.4$298.3 million during fiscal years 2016, 2015,2023 and 2014,2022, respectively. If we do not generate sufficient operating cash flows to support our operations and future planned cash requirements, our operations could be harmed and our access to credit facilities could be restricted or eliminated.

However, we believe that the trend of our historical cash flow generation, our projections of future operations and our available cash balances will provide sufficient liquidity to fund our operations for at least the next 12 months.
Our other contractual obligations and commitments that require cash are described in the following sections.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations and commitments asPurchase Commitments
As of March 31, 2016 (in thousands):
    Payments Due by Period
  March 31, 2016<1 year 1-3 years 4-5 years >5 years
Inventory commitments $158,063
 $158,063
 $—
 $—
 $—
Capital commitments 6,188
 6,188
 —
 —
 —
Expected contribution to employee benefit plan 4,881
 4,881
 *
 *
 *
Operating leases obligations 31,974
 7,558
 10,254
 7,623
 6,539
  $201,106
 $176,690
 $10,254
 $7,623
 $6,539
* Employee Benefit Plan Obligation:  Commitments under2023, we had non-cancelable purchase commitments of $368.1 million for inventory purchases made in the retirement plans relate tonormal course of business from original design manufacturers, contract manufacturers and other suppliers, the majority of which are expected contributions to be made to our defined benefit plans forfulfilled within the next year only.12 months. We fundrecorded a liability for firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or net realizable value consistent with our pension plans so that we meet at leastvaluation of excess and obsolete inventory. As of March 31, 2023, the minimum contributionliability for
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Table of Contents
these purchase commitments was $46.6 million and is recorded in accrued and other current liabilities in the consolidated balance sheet.
We have firm purchase commitments of $26.3 million for capital expenditures, primarily related to commitments for tooling and equipment for new and existing products and commitments to vendors to fit out and furnish office facilities. We expect to continue making capital expenditures in the future to support product development activities and ongoing and expanded operations. Although open purchase commitments are considered enforceable and legally binding, the terms generally allow us to reschedule or adjust our requirements as established by local government, funding and taxing authorities. Expected contributions and paymentsbased on business needs prior to our defined benefit pension plans and non-retirement post-employment benefit plans beyond one year are excluded from the contractual obligations table because they are dependent on numerous factors that may result in a wide rangedelivery of outcomes and thus are impractical to estimate. For more information on our defined benefit pension plans and non-retirement post-employment benefit plans, see Note 5 to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. goods or performance of services.
Operating Leases Obligation
We lease facilities under operating leases, certain of which require us to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at our option and usually include escalation clauses linked to inflation.inflation. The remaining terms onof our non-cancelable operating leases expire in various years through 2030.
Commitment for Acquisition
On April 20, 2016 we acquired Jaybird LLC of Salt Lake City, Utah, ("Jaybird") for approximately $50 millionthrough 2033. See Note 17 - Leases in cash, with an additional earn-out of upour Notes to $45 million based on achievement of growth targets over two years.
Purchase Commitments
As of March 31, 2016, we have fixed purchase commitments of $158.1 million for inventory purchases made in the normal course of business to original design manufacturers, contract manufacturers and other suppliers, the majority of which are expected to be fulfilled during the first quarter of fiscal year 2017. We recorded a liability for firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or market value consistent with our valuation of excess and obsolete inventory. As of March 31, 2016, the liability for these purchase commitments was $8.5 million and is recorded in accrued and other current liabilities and is notconsolidated financial statements included in the preceding table. We have fixed purchase commitments of $6.2 millionthis report for capital expenditures, primarily related to commitments for tooling, computer hardware and leasehold improvements. We expect to continue making capital expenditures in the future to support product development activities and ongoing and expanded operations as well as aligning our inventory strategy to transition from ODM to in-house production. Although open purchase commitments are considered enforceable and legally binding, the terms generally allow us the option to reschedule and adjust our requirements basedmore information on business needs prior to delivery of goods.leases.
Income Taxes Payable
As of March 31, 2016,2023, we had $59.7$106.4 million in non-current income taxes payable and $0.1 million in current income taxes payable, including interest and penalties, related to our income tax liability for uncertain tax positions. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in

individual years in connection with these tax liabilities; therefore, such amounts are not included in the above contractual obligation table.
Off-Balance Sheet Arrangements
We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us.
Investment Commitments
During 2015, we entered into a limited partnership agreement with a private investment fund specialized in early-stage start-up consumer hardware electronics companies and committed a capital contribution of $4.0 million over the life of the fund. As of March 31, 2016, $3.1 million of the committed capital contribution has not yet been called by the fund.
Settlement
In April 2016, we entered into a settlement with the SEC related to the accounting for Revue inventory valuation reserves that resulted in the restatement described in the Fiscal Year 2014 Annual Report on Form 10-K, revision to our consolidated financial statements concerning warranty accruals and amortization of intangible assets presented in our Amended Annual Report on Form 10-K/A, filed on August 7, 2013, and our transactions with a distributor for fiscal year 2007 through fiscal year 2009. We entered into the settlement without admitting or denying the findings of the SEC’s investigation and paid a civil penalty of $7.5 million. We made an accrual of the same amount in our consolidated financial statements as of March 31, 2016. This amount was paid in April 2016.
Guarantees
Logitech Europe S.A. guaranteed payments of third-party contract manufacturers' purchase obligations. As of March 31, 2016, the maximum amount of this guarantee was $3.8 million, of which $1.0 million of guaranteed purchase obligations were outstanding.liabilities.
Indemnifications
We indemnify certain of our suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances includes indemnification for damages and expenses, including reasonable attorneys'attorneys’ fees. As of March 31, 2016,2023, no amountsmaterial amounts have been accrued for indemnification provisions. We do not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under our indemnification arrangements.
We also indemnify our current and former directors and certain of our current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. We are unable to reasonably estimate the maximum amount that could be payable under these arrangements because these exposures are not capped, the obligations are conditional in nature, and the facts and circumstances involved in any situation that might arise are variable.
The Stock Purchase Agreement that we entered into in connection with the investment by three venture capital firms in Lifesize, Inc. contains representations, warranties and covenants
Logitech International S.A. | Fiscal 2023 Form 10-K | 49

Table of Logitech and Lifesize, Inc. to the Venture Investors. Subject to certain limitations, we have agreed to indemnify the Venture Investors and certain persons related to the Venture Investors for certain losses resulting from breaches of or inaccuracies in such representations, warranties and covenants as well as certain other obligations, including third party expenses, restructuring costs and pre-closing tax obligations of Lifesize.Contents
ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
Market risk represents the potential for loss due to adverse changes in the fair value of financial instruments. As a company with global concern,operations, we face exposure to adverse movements in currency exchange rates and interest rates. These exposures may change over time as business practices evolve and could have a material adverse impact on our financial results.

Currency Exchange Rates
We report our results in U.S. Dollars. Changes in currency exchange rates compared to the U.S. Dollar can have a material impact on our results when the financial statements of our non-U.S. subsidiaries are translated into U.S. Dollars. The functional currency of our operations is primarily the U.S. Dollar. Certain operations use the Swiss Franc or the local currency of the country as their functional currencies. Accordingly, unrealized currency gains or losses resulting from the translation of net assets or liabilities denominated in other currencies to the U.S. Dollar are accumulated in the cumulative translation adjustment component of accumulated other comprehensive income (loss) ("AOCI") in shareholders' equity.
We are exposed to currency exchange rate risk as we transact business in multiple currencies, including exposure related to anticipated sales, anticipated purchases and assets and liabilities denominated in currencies other than the U.S. Dollar. We transact business in overapproximately 30 currencies worldwide, of which the most significant to operations are the Euro, Chinese Renminbi, Japanese Yen, Australian Dollar, Taiwanese Dollar, British Pound, Canadian Dollar, Japanese YenPound Sterling and Mexican Peso.New Taiwan Dollar. For example, for the year ended March 31, 2016,2023, approximately 48%51% of our sales were in non-U.S. denominated currencies, with 25%23% of our net sales denominated in Euro. The mix of our costcosts of goods sold and operating expenses by currency are significantly different from the mix of our sales, with a larger portion denominated in U.S. Dollar and less denominated in Euro and other currencies. A strengthening U.S. Dollar has a more unfavorable impact on our sales thancompared to the favorable impact on our cost of goods sold and operating expense,expenses, resulting in an adverse impact on our operating results. As a result, a strengthening U.S. Dollar has

We enter into currency forward and swap contracts to reduce the short-term effects of currency fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of our subsidiaries. These contracts generally mature within approximately one month. The gains or losses on these contracts are recognized in earnings based on the changes in fair value.

If an adverse impact on our operating results. If the U.S. Dollar remains at its current strong levels in comparison to other currencies, this will affect our results of operations in future periods as well. The table below provides information about our underlying transactions that are sensitive to10% foreign currency exchange rate changes, primarilychange had been applied to total monetary assets and liabilities denominated in currencies other than the base currency, wherefunctional currencies at the net exposure is greater than $0.5balance sheet dates, it would have resulted in an adverse effect on income before income taxes of approximately $17.0 million and $24.4 million as of March 31, 2016.2023 and 2022, respectively. The table also presents the U.S. Dollar impact on earnings of a 10% appreciation and a 10% depreciation of the base currencyadverse effect as compared with the transaction currency (in thousands):
    March 31, 2016
Currency   
Net Exposed
Long (Short)
Currency
 
Currency Exchange Gain
(Loss) from 10% Change
in Base Currency
Base Currency 
Transaction
Currency
 Position Appreciation Depreciation
U.S. Dollar Japanese Yen $14,487
 $(1,317) $1,610
U.S. Dollar Mexican Peso 13,431
 (1,221) 1,492
U.S. Dollar Canadian Dollar 12,670
 (1,152) 1,408
U.S. Dollar Australian Dollar 10,588
 (963) 1,176
U.S. Dollar Indian Rupee 1,275
 (116) 142
U.S. Dollar Russian Ruble 543
 (49) 60
U.S. Dollar Korean Wan (799) 73
 (89)
U.S. Dollar Chinese Renminbi (3,452) 314
 (384)
U.S. Dollar Singapore Dollar (5,570) 506
 (619)
U.S. Dollar Taiwanese Dollar (14,242) 1,295
 (1,582)
Euro British Pound 3,780
 (344) 420
Euro Turkish Lira 2,001
 (182) 222
Euro U.S. Dollar 1,768
 (161) 196
Euro Croatian Kuna 640
 (58) 71
Euro Swedish Krona (1,168) 106
 (130)
Swiss Franc British Pound (758) 69
 (84)
    $35,194
 $(3,200) $3,909
Long currency positions represent net assets being held in the transaction currency while short currency positions represent net liabilities being held in the transaction currency.
Our principal manufacturing operations are located in China, with much of our component and raw material costs transacted in CNY. As of March 31, 2016, net liabilities held2023 and 2022 is after consideration of the offsetting effect of approximately $8.1 million and $15.9 million, respectively, from foreign exchange contracts in Chinese Renminbi (CNY) totaled $3.5 million.

Derivativesplace as of such dates.
We enter into foreign exchange forwardcash flow hedge contracts to hedgeprotect against exchange rate exposure to changes in currency exchange rates related to its subsidiaries'of forecasted inventory purchases. We have one entity with a Euro functional currency that purchases inventory in U.S. Dollars. The primary risk managed by using derivative instruments is the currency exchange rate risk. We have designated these derivatives as cash flow hedges. These hedging contracts mature within approximately four months, and are denominated in the same currency as the underlying transactions.months. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive lossAOCI until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. We assess the effectiveness of the hedges by comparing changes in the spot rate of the currency underlying the forward contract with changes in the spot rate of the currency in which the forecasted transaction will be consummated.
If the underlying transaction being hedged failsU.S. dollar had weakened by 10%, the amount recorded in AOCI related to occur or if a portion of the hedge does not generate offsetting changes in the currency exposure of forecasted inventory purchases, we immediately recognize the gain or loss on the associated financial instrument in other income (expense), net. Such gains and losses were not material during fiscal years 2016, 2015 and 2014. Cash flows from such hedges are classified as operating activities in the Consolidated Statements of Cash Flows. As of March 31, 2016 and 2015, the notional amounts ofour foreign exchange forward contracts outstanding related to forecasted inventory purchases were $39.8 million and $43.5 million, respectively. Deferred realized loss of $0.6 million are recorded in accumulated other comprehensive lossbefore tax effect as of March 31, 2016,2023 and are2022 would have been approximately $7.3 million and $12.5 million lower, respectively. The change in the fair value recorded in AOCI would be expected to be reclassified tooffset a corresponding foreign currency change in cost of goods sold when the relatedhedged inventory ispurchases are sold. Deferred unrealized loss of $1.1 million related to open cash flow hedges are also recorded in accumulated other comprehensive loss as of March 31, 2016 and these forward contracts will be revalued in future periods until the related inventory is sold, at which time the resulting gains or losses will be reclassified to cost of goods sold.
We also enter into foreign exchange forward and swap contracts to reduce the short-term effects of currency fluctuations on certain currency receivables or payables. These forward contracts generally mature within one month. The primary risk managed by using forward and swap contracts is the currency exchange rate risk. The gains or losses on these foreign exchange contracts are recognized in earnings based on the changes in fair value. Cash flows from these contracts are classified as operating activities in the consolidated statements of cash flows.
The notional amounts of foreign exchange forward and swap contracts outstanding as of March 31, 2016 and 2015 relating to foreign currency receivables or payables were $63.7 million and $61.7 million, respectively. Open forward and swap contracts as of March 31, 2016 and 2015 consisted of contracts in Taiwanese Dollars, Australian Dollars, Mexican Pesos, Japanese Yen and British Pounds to be settled at future dates at pre-determined exchange rates.
Interest Rates
Changes in interest rates could impact our future interest income on our cash equivalents and investment securities. We prepared a sensitivity analysis of our interest rate exposures to assess the impact of hypothetical changes in interest rates. Based on the results of this analysis, a 100 basis point decrease or increase in interest rates from the March 31, 2016 and March 31, 2015 period end rates would not have a material effect on our results of operations or cash flows.
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Logitech's financial statements and supplementary data required by this item are set forth as a separate section of this Annual Report on Form 10-K. See Item 15 (a)15(a) for a listing of financial statements and supplementary data provided in the section titled "Financial Statements and Supplementary Data.Statements."
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.

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ITEM 9A.    CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
The CompanyCompany's management, with the participation of the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), has conducted an evaluation of the effectiveness of the design and operation of itsthe Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934,

as amended (the “Exchange Act”)) (“Disclosure Controls”Exchange Act)) as of the end of the period covered by this Annual Report on Form 10-K (this “Report”)Annual Report) required by Exchange Act Rules 13a-15(b) or 15d-15(b). TheDisclosure controls evaluation was conductedand procedures are designed to reasonably assure that information required to be disclosed in our reports filed or submitted under the supervisionExchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized and withreported within the participation oftime periods specified in the Company’sSecurities and Exchange Commission's rules and forms. Disclosure controls and procedures are also designed to reasonably assure that this information is accumulated and communicated to our management, including the Company’s Chief Executive Officer (“CEO”)CEO and Chief Financial Officer (“CFO”).CFO, to allow timely decisions regarding required disclosure. Based on this evaluation, the CEO and CFO have concluded that, as of the end of the period covered by this Annual Report, the Company’s Disclosure Controlsdisclosure controls and procedures were effective at a reasonable assurance level.


Attached as exhibits to this Annual Report are certifications of the CEO and CFO, which are required in accordance with Rule 13a-14 of the Exchange Act. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications, and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Definition of Disclosure Controls

Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in the Company’s reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. The Company’s Disclosure Controls include components of its internal control over financial reporting, which consists of control processes designed to provide reasonable assurance regarding the reliability of its financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the United States. To the extent that components of the Company’s internal control over financial reporting are included within its Disclosure Controls, they are included in the scope of the Company’s annual controls evaluation.
(b) Management's Report on Internal Control over Financial Reporting
The Company’sCompany's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of the Company’s management, including the CEO and CFO, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the criteria established in the framework in Internal Control—IntegratedControl-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the Company’s management has concluded that the Company’sour internal control over financial reporting was effective as of March 31, 2016.2023.


The effectiveness of the Company’sCompany's internal control over financial reporting as of March 31, 20162023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in theirits report, which appears in Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.15.
(c) Changes in Internal ControlsControl over Financial Reporting:Reporting
There were no changes in the Company’sCompany's internal control over financial reporting that occurred during the fourth quarter of fiscal year 20162023 that have materially affected, or are reasonably likely to materially affect, the Company’sour internal control over financial reporting.

(d) Limitations on the Effectiveness of Controls
The Company's management, including the Chief Executive OfficerCEO and Chief Financial Officer,the CFO, does not expect that the Company's disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. Internal control over financial reporting, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives will be met. Because of the inherent limitations in internal control over financial reporting, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or

procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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ITEM 9B.    OTHER INFORMATION
None.


ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III


ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 
Information regarding our executive officers is incorporated herein by reference to Part I, Item 1, above.
Other information required by this Item may be found in the definitive Proxy Statement for the 20162023 Annual Meeting of Shareholders and is incorporated herein by reference. The definitive Proxy Statement will be filed with the Commission within 120 days after our fiscal year end of March 31, 2016 (the "Proxy Statement").
The Company's code of ethics policy entitled, "Logitech Code of Conduct" covers members of the Company's board of directors, the principal executive officer, principal financial and accounting officer and other executive officers as well as all other employees.
        The code of ethics addresses, among other things, the following items:
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 
Full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Commission and in other public communications made by us;
Compliance with applicable governmental laws, rules and regulations; 
The prompt internal reporting to an appropriate person or persons identified in the code of violations of any of the provisions described above; and 
Accountability for adherence to the code.
Any amendments or waivers of the code of ethics for members of the Company's board of directors or executive officers will be disclosed in the investor relations section of the Company's Web sitewebsite within four business days following the date of the amendment or waiver. During fiscal year 2016,2020, the Company updated and revised its code of ethics. The new code was posted to the investor relations section of the Company's website.
Logitech's code of ethics is available on the Company's Web sitewebsite at www.logitech.com, and for no charge, a copy of the Company's code of ethics can be requested viathrough the following address or phone number:
Logitech
Investor Relations
7700 Gateway Boulevard
Newark, CA 94560 USA
Main 510-795-8500(510) 795-8500    
ITEM 11.    EXECUTIVE COMPENSATION 
The information required by this item may be found in the Proxy Statement for the 20162023 Annual Meeting of Shareholders and is incorporated herein by reference.
ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 
The information required by this item may be found in the Proxy Statement for the 20162023 Annual Meeting of Shareholders and is incorporated herein by reference.
ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 
The information required by this item may be found in the Proxy Statement for the 20162023 Annual Meeting of Shareholders and is incorporated herein by reference.
ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES 
The information required by this item may be found in the Proxy Statement for the 20162023 Annual Meeting of Shareholders and is incorporated herein by reference.

Logitech International S.A. | Fiscal 2023 Form 10-K | 53

Table of Contents
ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)The following documents are filed as part of this Annual Report on Form 10-K:
(a)The following documents are filed as part of this Annual Report on Form 10-K:
1. Financial Statements and Supplementary Data
Financial Statements:
Report of Independent Registered Public Accounting Firm - KPMG LLP
Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP
Consolidated Statements of Operations—Years Ended March 31, 2016, 20152023, 2022 and 20142021
Consolidated Statements of Comprehensive Income (Loss)—Income—Years Ended March 31, 2016, 20152023, 2022 and 20142021
Consolidated Balance Sheets—March 31, 20162023 and 20152022
Consolidated Statements of Cash Flows—Years Ended March 31, 2016, 20152023, 2022 and 20142021
Consolidated Statements of Changes in Shareholders' Equity—Years Ended March 31, 2016, 20152023, 2022 and 20142021
Notes to Consolidated Financial Statements
Supplementary Data:
Unaudited Quarterly Financial Data
2. Financial Statement Schedule
Schedule II—Valuation and Qualifying Accounts
3. Exhibits

Logitech International S.A. | Fiscal 2023 Form 10-K | 54

Table of Contents
Index to Exhibits


   Incorporated by Reference 
Exhibit No. ExhibitFormFile No.Filing DateExhibit No.Filed
Herewith
3.1X
3.210-Q0-291741/21/20213.1
4.1X
10.1**S-8333-1008545/27/20034.2 
10.2**DEFA14A0-291747/26/2022App. A
10.3**10-Q0-2917411/4/200810.1 
10.4**DEFA14A0-291747/23/2013App. A 
10.5**DEFA14A0-291747/23/2013App. B
10.6**20-F0-291745/21/20034.1
10.7**20-F0-291745/21/20034.2
10.8**DEFA14A0-291747/23/2013App. C
10.9**10-Q0-2917411/4/200910.2
10.10**10-Q0-291742/5/201310.2
10.11**10-Q0-291741/22/201610.1
10.12**10-K0-291745/26/201710.33
10.13**10-K0-291745/26/201710.34
10.14**10-Q0-2917410/25/201810.1
10.15**8-K0-291747/23/201910.1
10.16**10-Q0-291747/23/202010.1
Logitech International S.A. | Fiscal 2023 Form 10-K | 55

Table of Contents
      Incorporated by Reference  
Exhibit No.   Exhibit Form File No. Filing Date Exhibit No. 
Filed
Herewith
2.1   Agreement and Plan of Merger, dated as of November 10, 2009, as amended by the First Amendment to Agreement and Plan of Merger, entered into as of November 16, 2009, both by and among Logitech Inc., Agora Acquisition Corporation, Lifesize Communications, Inc., Shareholder Representative Services LLC, as stockholder representative, and U.S. Bank National Association, as escrow agent. 8-K 0-29174 12/14/2009 2.1  
2.2 *** Securities Purchase Agreement, dated as of April 12, 2016, by and among Logitech Europe S.A., JayBird, LLC, the unitholders of JayBird, LLC, and Judd Armstrong (as the sellers' representative)         X
3.1   Articles of Incorporation of Logitech International S.A., as amended 10-Q 0-29174 1/27/2015 3.1  
3.2   Organizational Regulations of Logitech International S.A., as amended 10-K 0-29174 6/1/2009 3.2  
10.1 ** 1996 Stock Plan, as amended S-8 333-100854 5/27/2003 4.2  
10.2 ** Logitech International S.A. 2006 Stock Incentive Plan, as amended and restated effective September 5, 2012 DEFA14A 0-29174 8/10/2012 App. A  
10.3 ** Representative form of Performance Restricted Stock Unit agreement (executives) under the Logitech International S.A. 2006 Stock Incentive Plan for grants in 2008 to 2010 10-K 0-29174 6/1/2009 10.3  
10.4 ** Logitech Inc. Management Deferred Compensation Plan 10-Q 0-29174 11/4/2008 10.1  
10.5 ** 1996 Employee Share Purchase Plan (U.S.), as amended and restated DEFA14A 0-29174 7/23/2013 App. A  
10.6 ** 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated DEFA14A 0-29174 7/23/2013 App. B  
10.7 ** Form of Director and Officer Indemnification Agreement with Logitech International S.A. 20-F 0-29174 5/21/2003 4.1  
10.8 ** Form of Director and Officer Indemnification Agreement with Logitech Inc. 20-F 0-29174 5/21/2003 4.2  
10.9 ** Logitech Management Performance Bonus Plan, as amended and restated DEFA14A 0-29174 7/23/2013 App. C  
10.10 ** Employment agreement dated January 28, 2008 between Logitech Inc. and Guerrino De Luca 10-K 0-29174 5/30/2008 10.1  
10.11 ** Representative form of stock option agreement (non-executive board members) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/4/2009 10.1  
10.12 ** Representative form of stock option agreement (employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/4/2009 10.2  

10.13 ** Representative form of restricted stock unit agreement (non-executive board members) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/4/2009 10.3  
10.14 ** Representative form of restricted stock unit agreement (executives) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/4/2009 10.4  
10.15 ** Representative form of Performance Restricted Stock Unit agreement (executives) under the Logitech International S.A. 2006 Stock Incentive Plan for grants in 2011 10-K 0-29174 5/27/2011 10.3  
10.16 ** 2012 Stock Inducement Equity Plan S-8 333-180726 4/13/2012 10.1  
10.17 ** Representative form of stock option agreement under the 2012 Stock Inducement Equity Plan S-8 333-180726 4/13/2012 10.2  
10.18 ** Representative form of restricted stock unit agreement under the 2012 Stock Inducement Equity Plan S-8 333-180726 4/13/2012 10.3  
10.19 ** Representative form of restricted stock unit agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan for grants starting in 2013 10-Q 0-29174 2/5/2013 10.1  
10.20 ** Representative form of performance stock option agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 2/5/2013 10.2  
10.21 ** Representative form of performance restricted stock unit agreement (non-executive employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 2/5/2013 10.3  
10.22 ** Representative form of performance share unit agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan for grants starting in April 2013 10-K 0-29174 5/30/2013 10.4  
10.23 ** Form of restricted stock unit agreement for new hire grants to Vincent Pilette on September 15, 2013 under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/5/2013 10.2  
10.24 ** Form of performance share unit agreement for new hire grants to Vincent Pilette on September 15, 2013 under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/5/2013 10.3  
10.25 ** Form of restricted stock unit agreement for grant to Guerrino De Luca on October 15, 2013 under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/5/2013 10.4  
10.26 ** Employment Agreement between Logitech Inc. and Bracken Darrel, dated as of December 18, 2015 10-Q 0-29174 1/22/2016 10.1  
10.27 ** Employment Agreement between Logitech Inc. and Vincent Pilette, dated as of December 18, 2015 10-Q 0-29174 1/22/2016 10.2  
10.28 ** Employment Agreement between Logitech Inc. and L. Joseph Sullivan, dated as of December 18, 2015 10-Q 0-29174 1/22/2016 10.3  
10.29 ** Employment Contract between Logitech Inc. and Marcel Stolk, dated as of December 18, 2015 10-Q 0-29174 1/22/2016 10.4  

10.30 Series B Preferred Stock Purchase Agreement, dated as of December 28, 2015, by and between Logitech International S.A., Lifesize, Inc., and Investors associated with Redpoint Ventures, Sutter Hill Ventures and Meritech Capital Partners. 10-Q 0-29174 1/22/2016 10.5 
10.31 ** Representative form of restricted stock unit agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan X
10.32 ** Representative form of performance share unit agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan X
10.1710.17**10-Q0-291747/23/202010.2
10.1810.18**X
10.1910.19**X
10.2010.20**10-Q0-291747/28/202210.1
10.2110.21**10-Q0-291747/28/202210.2
21.1   List of subsidiaries of Logitech International S.A.         X21.1X
23.1.1   Consent of Independent Registered Public Accounting Firm - KPMG LLP         X
23.1.2   Consent of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP         X
23.123.1X
24.1   Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)         X24.1     X
31.1   Certification by Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002         X31.1X
31.2   Certification by Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002         X31.2X
32.1 * Certification by Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002         X32.1X
101.INS   XBRL Instance Document         X101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document    X
101.SCH  XBRL Taxonomy Extension Schema Document X101.SCHXBRL Taxonomy Extension Schema DocumentX
101.CAL  XBRL Taxonomy Extension Calculation Linkbase Document X101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEF  XBRL Taxonomy Extension Definition Linkbase Document X101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentX
101.LAB  XBRL Taxonomy Extension Label Linkbase Document X101.LABXBRL Taxonomy Extension Label Linkbase DocumentX
101.PRE  XBRL Taxonomy Extension Presentation Linkbase Document X101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentX
104104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)X



* This exhibit is furnished herewith, but not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate it by reference.
** Indicates management compensatory plan, contract or arrangement.
***Confidential treatment has been requested for certain provisions omitted from this exhibit pursuant to Rule 406 promulgated under the Securities Act
Logitech International S.A. | Fiscal 2023 Form 10-K | 56

Table of 1933, as amended. The omitted information has been filed separately with the Securities and Exchange Commission.Contents

SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


LOGITECH INTERNATIONAL S.A.
/s/ BRACKEN DARRELLBracken Darrell

Bracken Darrell

President and Chief Executive Officer
 /s/ VINCENT PILETTE

Vincent Pilette
/s/ Charles Boynton
Charles Boynton
Chief Financial Officer
May 23, 201617, 2023






Logitech International S.A. | Fiscal 2023 Form 10-K | 57

Table of Contents
POWER OF ATTORNEY AND SIGNATURES


KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Bracken Darrell and Vincent Pilette,Charles Boynton, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


SignatureTitleDate
SignatureTitleDate
/s/ GUERRINO DE LUCAWendy Becker
Guerrino De LucaWendy Becker
ChairmanChairperson of the BoardMay 23, 201617, 2023
/s/ BRACKEN DARRELLBracken Darrell
Bracken Darrell
President, and Chief Executive Officer and Director (Principal Executive Officer)May 23, 201617, 2023
/s/ VINCENT PILETTECharles Boynton
Vincent PiletteCharles Boynton
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)May 23, 201617, 2023
/s/ DIDIER HIRSCHPatrick Aebischer
Didier HirschPatrick Aebischer
DirectorMay 23, 201617, 2023
/s/ DIMITRI PANAYOTOPOULOSEdouard Bugnion
Dimitri PanayotopoulosEdouard Bugnion
DirectorMay 23, 201617, 2023
/s/ EDOUARD BUGNIONGuy Gecht
Edouard BugnionGuy Gecht
DirectorMay 23, 201617, 2023
/s/ KEE-LOCK CHUAChristopher Jones
Kee-Lock ChuaChristopher Jones
DirectorMay 23, 201617, 2023
/s/ Marjorie Lao
Marjorie Lao
DirectorMay 17, 2023
/s/ LUNG YEHNeela Montgomery
Lung YehNeela Montgomery
DirectorMay 23, 201617, 2023
/s/ NEIL HUNTKwok Wang Ng
Neil HuntKwok Wang Ng
DirectorMay 23, 201617, 2023
/s/ SALLY DAVISMichael Polk
Sally DavisMichael Polk
DirectorMay 23, 201617, 2023
/s/ SUE GOVEDeborah Thomas
Sue GoveDeborah Thomas
DirectorMay 23, 201617, 2023
/s/ Sascha Zahnd
Sascha Zahnd
DirectorMay 17, 2023

Logitech International S.A. | Fiscal 2023 Form 10-K | 58



Table of Contents

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
7160
73
Consolidated Statements of OperationsOperations—Years Ended March 31, 2023, 2022 and 2021
7463
7564
7665
7766
7967
8068
INDEX TO SUPPLEMENTARY DATA
Unaudited Quarterly Financial Data
114



Logitech International S.A. | Fiscal 2023 Form 10-K | 59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors and Stockholders
Logitech International S.A.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Logitech International S.A. and subsidiaries (the Company) as of March 31, 20162023 and 2015, and2022, the related consolidated statements of operations, comprehensive income, (loss), stockholders’changes in shareholders’ equity, and cash flows for each of the years in the two-yearthree-year period ended March 31, 2016. In connection with our audits of2023, and the related notes and financial statement schedule II (collectively, the consolidated financial statements, we also have audited the related financial statement schedule listed in the accompanying index for each of the years in the two-year period ended March 31, 2016.statements). We also have audited the Company’s internal control over financial reporting as of March 31, 2016,2023, based oncriteria established inInternal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Logitech International S.A.’sCommission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2023, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sManagement's Report on Internal Control over Financial Reporting included in Item 9A.Reporting. Our responsibility is to express an opinion on thesethe Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. The accompanying consolidated financial statementsWe are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and financial statement schedule of Logitech International S.A.,are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and subsidiaries for the year ended March 31, 2014, were audited by other auditors whose report thereon dated November 13, 2014, expressed an unqualified opinion on those consolidated financial statementsapplicable rules and financial statement schedule, before the effectsregulations of the retrospective adjustments described in Note 3 toSecurities and Exchange Commission and the consolidated financial statements.PCAOB.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, andas well as evaluating the overall presentation of the consolidated financial statement presentation.statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.


Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
Logitech International S.A. | Fiscal 2023 Form 10-K | 60

with generally accepted accounting principles, and that receipts and expenditures of the Companycompany are being made only in accordance with authorizations of management and directors of the Company;company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’scompany’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


In our opinion,Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Logitech International S.A. and subsidiaries as of March 31, 2016 ad 2015, and the results of their operations and their cash flows for each of the years in the two-year period ended March 31, 2016, and the related financial statement schedule, in conformity with U.S. generally accepted accounting principles. Also in our opinion, Logitech International S.A. maintained, in all material respects, effective internal control over financial reporting as of March 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.


We also have audited the retrospective adjustments described in Note 3 that were appliedcommunicated or required to be communicated to the accompanying 2014audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and the related financial statement schedule to present the operations(2) involved our especially challenging, subjective, or complex judgments. The communication of the Video Conferencing segment as discontinued operations. Incritical audit matters does not alter in any way our opinion such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2014 consolidated financial statements of the Company other than with respect to the retrospective adjustments, and accordingly, we do not express an opinion or any other form of assurance on the 2014 consolidated financial statements, taken as a whole.whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the significant assumptions underlying the breakage rates for certain Customer Programs

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accounts receivable allowances totaling $211.0 million and accrued Customer Program liabilities totaling $206.5 million as of March 31, 2023 for various cooperative marketing arrangements and customer incentive and pricing programs (collectively, Customer Programs). The Company estimates the percentage of Customer Programs that will not be claimed or will not be earned by customers, which is commonly referred to as “breakage”. Breakage reduces the Company’s allowances and accruals for certain Customer Programs and it is applied at the time of sale. The Company uses judgment in assessing the period in which claims are expected to be submitted and the relevance of historical claim experience.

We identified the evaluation of the significant assumptions underlying the breakage rates for certain Customer Programs as a critical audit matter. The significant assumptions in the breakage rates estimate included: 1) the determination of the period in which the claims are expected to be submitted by the customers, 2) the assessment of the relevance of historical customer claim experience, and 3) the assessment of the relevance of the historical trend of claims submitted after the expected period. A high degree of auditor judgment was required to evaluate the significant assumptions, due to the inherent uncertainties related to such assumptions as well as recent changes in certain customers’ claim processing behavior in the current economic environment.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of internal control related to the process to determine the breakage rates estimate. This included a control related to the Company’s evaluation of the significant assumptions in the breakage rates estimate. We evaluated the underlying information related to the expected period that a customer claim will be submitted and assessed the relevance of historical claim experience by analyzing the trend in the customers’ historical claims and accruals information for certain Customer Programs. We assessed the relevance of the historical trend of claims submitted after the expected period by analyzing the trend of historical claims received after the expected period compared to the total earned amount of each respective period. In addition, we evaluated the Company’s ability to estimate the breakage rates by comparing the estimated breakage from fiscal year 2022 to actual subsequent breakage in fiscal year 2023.

Assessment of the accruals for certain Customer Programs

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accrued Customer Program liabilities of $206.5 million as of March 31, 2023. The Company records these accruals as a reduction of revenue at the time of sale. For certain of these accruals, the Company estimated the amounts based on historical data or future commitments that are planned and controlled by the Company. The Company uses judgment in analyzing historical trends, inventories owned by and located at the customers, products sold by the direct customers to end customers or resellers, known product quality issues, negotiated terms, and
Logitech International S.A. | Fiscal 2023 Form 10-K | 61

other relevant customer and product information, such as stage of product life-cycle, which are expected to experience unusually high discounting.

We identified the assessment of the accruals for certain Customer Programs as a critical audit matter. Historical experience being predictive of Customer Programs’ earned amounts is the significant assumption used to estimate the accruals for Customer Programs. Due to the inherent uncertainties related to the relevance of the predictive historical experience to the determination of the estimate, the testing required a high degree of auditor judgment.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the Company’s assessment of whether historical experience is predictive of Customer Programs’ earned amounts and the Company’s validation of the underlying channel inventory data used to estimate the accruals for Customer Programs. We assessed the historical experience used in estimating the accruals for certain Customer Programs using a combination of the Company’s internal historical information of sales, Customer Programs’ earned amounts, third-party contracts, and relevant and reliable third-party channel inventory and sell-through data. We inspected selected customer contracts to assess the terms and conditions related to certain Customer Programs. We analyzed channel inventory data trends by product and by region comparing fiscal year 2023 quarterly channel inventory weeks on-hand ratios to prior fiscal years. In addition, we evaluated the Company’s ability to estimate the accruals for certain Customer Programs by comparing recorded accruals from fiscal year 2022 to actual subsequent Customer Programs’ earned amounts in fiscal year 2023.    

/s/ KPMG LLP
Santa Clara,
We have served as the Company’s auditor since 2014.

San Francisco, California

May 23, 201617, 2023




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of Logitech International S.A.:

In our opinion, the consolidated statements of operations, of comprehensive income and of cash flows for the year ended March 31, 2014, before the effects of the adjustments to retrospectively reflect the discontinued operations described in Note 3, present fairly, in all material respects, the results of operations and cash flows of Logitech International S.A. and its subsidiaries for the year ended March 31, 2014, in conformity with accounting principles generally accepted in the United States| Fiscal 2023 Form 10-K | 62

Table of America (the 2014 financial statements before the effects of the adjustments discussed in Note 3 are not presented herein). In addition, in our opinion, the financial statement schedule, before the effects of the adjustments described above, for the year ended March 31, 2014 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit. We conducted our audit, before the effects of the adjustments described above, of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.Contents

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively reflect the discontinued operations described in Note 3 and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.



/s/ PricewaterhouseCoopers LLP
San Jose, California
November 13, 2014



LOGITECH INTERNATIONAL S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 Years Ended March 31, Years Ended March 31,
 2016 2015 2014 202320222021
Net sales $2,018,100
 $2,004,908
 $2,008,028
Net sales$4,538,818 $5,481,101 $5,252,279 
Cost of goods sold 1,337,053
 1,299,451
 1,346,489
Cost of goods sold2,806,438 3,204,072 2,903,215 
Amortization of intangible assetsAmortization of intangible assets12,865 14,023 13,329 
Gross profit 681,047
 705,457
 661,539
Gross profit1,719,515 2,263,006 2,335,735 
Operating expenses:  
  
  
Operating expenses:   
Marketing and selling 319,015
 321,749
 322,707
Marketing and selling809,182 1,025,899 770,284 
Research and development 113,624
 108,306
 112,446
Research and development280,796 291,844 226,023 
General and administrative 101,548
 125,995
 112,689
General and administrative124,652 148,648 166,577 
Amortization of intangible assets and acquisition-related costsAmortization of intangible assets and acquisition-related costs11,843 16,947 19,064 
Impairment of intangible assetsImpairment of intangible assets— 7,000 — 
Change in fair value of contingent consideration for business acquisitionChange in fair value of contingent consideration for business acquisition— (3,509)5,716 
Restructuring charges (credits), net 17,802
 (4,777) 8,001
Restructuring charges (credits), net34,573 2,165 (54)
Total operating expenses 551,989
 551,273
 555,843
Total operating expenses1,261,046 1,488,994 1,187,610 
Operating income 129,058
 154,184
 105,696
Operating income458,469 774,012 1,148,125 
Interest income (expense), net 790
 1,197
 (431)
Interest incomeInterest income18,331 1,246 1,784 
Other income (expense), net 1,624
 (2,298) 2,039
Other income (expense), net(13,278)560 (1,789)
Income from continuing operations before income taxes
 131,472
 153,083
 107,304
Income before income taxesIncome before income taxes463,522 775,818 1,148,120 
Provision for income taxes 3,110
 4,654
 1,313
Provision for income taxes98,947 131,305 200,863 
Net income from continuing operations $128,362
 $148,429
 $105,991
Loss from discontinued operations, net of income taxes
 (9,045) (139,146) (31,687)
Net income $119,317
 $9,283
 $74,304
Net income$364,575 $644,513 $947,257 
      
Net income (loss) per share - basic:  
  
  
Continuing operations $0.79
 $0.91
 $0.66
Discontinued operations (0.06) (0.85) (0.20)
Net income per share - basic $0.73
 $0.06
 $0.46

 

 

 

Net income (loss) per share - diluted: 

 

 

Continuing operations $0.77
 $0.89
 $0.65
Discontinued operations (0.05) (0.83) (0.19)
Net income per share - diluted $0.72
 $0.06
 $0.46
      
Weighted average shares used to compute net income (loss) per share:  
  
  
Net income per share:Net income per share:   
Basic 163,296
 163,536
 160,619
Basic$2.25 $3.85 $5.62 
Diluted 165,792
 166,174
 162,526
Diluted$2.23 $3.78 $5.51 
      
Cash dividends per share $0.53
 $0.27
 $0.22
Weighted average shares used to compute net income per share:Weighted average shares used to compute net income per share:   
BasicBasic162,302 167,447 168,523 
DilutedDiluted163,704 170,414 171,775 
   The accompanying notes are an integral part of these consolidated financial statements.

Logitech International S.A. | Fiscal 2023 Form 10-K | 63

Table of Contents
LOGITECH INTERNATIONAL S.A.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
 Years Ended March 31, Years Ended March 31,
 2016 2015 2014 202320222021
Net income $119,317
 $9,283
 $74,304
Net income$364,575 $644,513 $947,257 
Other comprehensive income (loss):  
  
  
Other comprehensive income (loss):   
Currency translation gain (loss):  
  
  
Currency translation gain (loss):   
Currency translation gain (loss), net of taxes 2,273
 (19,054) 2,119
Currency translation gain (loss), net of taxes1,373 (14,051)12,695 
Reclassification of currency translation loss (gain) included in other income (expense), net 3,913
 (171) 665
Reclassification of cumulative translation adjustments included in other income (expense), netReclassification of cumulative translation adjustments included in other income (expense), net219 1,051 (1,738)
Defined benefit plans:  
  
  
Defined benefit plans:   
Net gain (loss) and prior service credits (costs), net of taxes (837) (12,998) 5,551
Reclassification of amortization included in operating expenses 1,630
 322
 2,017
Net gain (loss) and prior service costs, net of taxesNet gain (loss) and prior service costs, net of taxes16,089 22,328 (4,701)
Reclassification of amortization included in other income (expense), netReclassification of amortization included in other income (expense), net(8,069)(2,623)1,517 
Hedging gain (loss):  
  
  
Hedging gain (loss):   
Deferred hedging gain (loss), net of taxes (2,431) 8,971
 (3,497)Deferred hedging gain (loss), net of taxes2,625 6,308 (4,071)
Reclassification of hedging loss (gain) included in cost of goods sold (3,296) (4,505) 2,472
Reclassification of hedging loss (gain) included in cost of goods sold(8,391)(8,221)8,043 
Other comprehensive income (loss) 1,252
 (27,435) 9,327
Total comprehensive income (loss) $120,569
 $(18,152) $83,631
Total other comprehensive incomeTotal other comprehensive income3,846 4,792 11,745 
Total comprehensive incomeTotal comprehensive income$368,421 $649,305 $959,002 
   The accompanying notes are an integral part of these consolidated financial statements.



Logitech International S.A. | Fiscal 2023 Form 10-K | 64

Table of Contents
LOGITECH INTERNATIONAL S.A.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 March 31, March 31,
 2016 2015 20232022
Assets    Assets
Current assets:    Current assets:
Cash and cash equivalents $519,195
 $533,380
Cash and cash equivalents$1,149,023 $1,328,716 
Accounts receivable, net 142,778
 167,196
Accounts receivable, net630,382 675,604 
Inventories 228,786
 255,980
Inventories682,893 933,124 
Other current assets 35,488
 63,362
Other current assets142,876 135,478 
Current assets of discontinued operations —
 32,102
Total current assets 926,247
 1,052,020
Total current assets2,605,174 3,072,922 
Non-current assets:  
  
Non-current assets:  
Property, plant and equipment, net 92,860
 86,478
Property, plant and equipment, net121,503 109,807 
Goodwill 218,224
 218,213
Goodwill454,610 448,175 
Other intangible assets, netOther intangible assets, net63,173 83,779 
Other assets 86,816
 62,333
Other assets316,293 320,722 
Long-term assets of discontinued operations —
 7,636
Total assets $1,324,147
 $1,426,680
Total assets$3,560,753 $4,035,405 
Liabilities and Shareholders' Equity    
Liabilities and Shareholders' Equity 
Current liabilities:    
Current liabilities: 
Accounts payable $241,166
 $292,797
Accounts payable$406,968 $636,306 
Accrued and other current liabilities 173,764
 163,344
Accrued and other current liabilities643,139 784,848 
Current liabilities of discontinued operations —
 38,766
Total current liabilities 414,930
 494,907
Total current liabilities1,050,107 1,421,154 
Non-current liabilities:  
  
Non-current liabilities:  
Income taxes payable 59,734
 72,107
Income taxes payable106,391 83,380 
Other non-current liabilities 89,535
 91,195
Other non-current liabilities146,695 132,133 
Long-term liabilities of discontinued operations —
 10,337
Total liabilities 564,199
 668,546
Total liabilities1,303,193 1,636,667 
Commitments and contingencies (Note 13) 

 

Commitments and contingencies (Note 13)
Shareholders' equity:    
Shareholders' equity: 
Registered shares, CHF 0.25 par value: 30,148
 30,148
Registered shares, CHF 0.25 par value:30,148 30,148 
Issued and authorized shares—173,106 at March 31, 2016 and 2015    
Conditionally authorized shares—50,000 at March 31, 2016 and 2015    
Issued shares —173,106 at March 31, 2023 and 2022Issued shares —173,106 at March 31, 2023 and 2022 
Additional shares that may be issued out of conditional capital — 50,000 at March 31, 2023 and 2022Additional shares that may be issued out of conditional capital — 50,000 at March 31, 2023 and 2022 
Additional shares that may be issued out of authorized capital — 17,311 at March 31, 2023 and 2022Additional shares that may be issued out of authorized capital — 17,311 at March 31, 2023 and 2022
Additional paid-in capital 6,616
 —
Additional paid-in capital127,380 129,925 
Less shares in treasury, at cost—10,697 at March 31, 2016 and 8,625 at March 31, 2015 (128,407) (88,951)
Shares in treasury, at cost — 13,763 and 7,855 shares at March 31, 2023 and 2022, respectivelyShares in treasury, at cost — 13,763 and 7,855 shares at March 31, 2023 and 2022, respectively(977,266)(632,893)
Retained earnings 963,576
 930,174
Retained earnings3,177,575 2,975,681 
Accumulated other comprehensive loss (111,985) (113,237)Accumulated other comprehensive loss(100,277)(104,123)
Total shareholders' equity 759,948
 758,134
Total shareholders' equity2,257,560 2,398,738 
Total liabilities and shareholders' equity $1,324,147
 $1,426,680
Total liabilities and shareholders' equity$3,560,753 $4,035,405 
   The accompanying notes are an integral part of these consolidated financial statements.

Logitech International S.A. | Fiscal 2023 Form 10-K | 65

Table of Contents
LOGITECH INTERNATIONAL S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Years Ended March 31,
 202320222021
Cash flows from operating activities:
Net income$364,575 $644,513 $947,257 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation76,309 88,361 50,752 
Amortization of intangible assets24,407 30,179 31,818 
Impairment of intangible assets— 7,000 — 
Loss on investments14,073 1,683 5,910 
Share-based compensation expense70,782 93,479 86,019 
Deferred income taxes30,714 27,334 34,484 
Change in fair value of contingent consideration for business acquisition— (3,509)5,716 
Pension curtailment gains(4,225)— — 
Other1,005 1,140 (1,784)
Changes in assets and liabilities, net of acquisitions:   
Accounts receivable, net51,185 (71,510)(201,220)
Inventories247,309 (276,640)(427,501)
Other assets5,634 (18,169)(67,708)
Accounts payable(219,051)(181,303)553,960 
Accrued and other liabilities(128,707)(44,240)440,935 
Net cash provided by operating activities534,010 298,318 1,458,638 
Cash flows from investing activities:   
Purchases of property, plant and equipment(92,353)(89,152)(76,189)
Investment in privately held companies(4,357)(1,463)(4,115)
Acquisitions, net of cash acquired(8,527)(16,236)(43,523)
Proceeds from return of strategic investments— — 2,934 
Purchases of short-term investments— (10,000)— 
Proceeds from the sale of short-term investments— 8,260 — 
Purchases of deferred compensation investments(6,702)(5,058)(12,336)
Proceeds from sales of deferred compensation investments6,209 5,786 13,247 
Net cash used in investing activities(105,730)(107,863)(119,982)
Cash flows from financing activities:   
Payment of cash dividends(158,680)(159,410)(146,705)
Payment of contingent consideration for business acquisition(5,954)(880)— 
Purchases of registered shares(418,346)(412,022)(164,952)
Proceeds from exercises of stock options and purchase rights28,790 29,649 43,810 
Tax withholdings related to net share settlements of restricted stock units(29,163)(64,156)(32,082)
Net cash used in financing activities(583,353)(606,819)(299,929)
Effect of exchange rate changes on cash and cash equivalents(24,620)(5,247)(3,966)
Net (decrease) increase in cash and cash equivalents(179,693)(421,611)1,034,761 
Cash and cash equivalents at beginning of the period1,328,716 1,750,327 715,566 
Cash and cash equivalents at end of the period$1,149,023 $1,328,716 $1,750,327 
Supplementary Cash Flow Disclosures:
Non-cash investing and financing activities:   
Property, plant and equipment purchased during the period and included in period end liability accounts$8,593 $11,890 $16,819 
Non-cash payment for contingent consideration for acquisition$— $292 $28,463 
Fair value of contingent consideration in accrued and other liabilities$2,151 $9,013 $— 
Supplemental cash flow information:   
Income taxes paid, net$71,955 $192,898 $23,041 
The accompanying notes are an integral part of these consolidated financial statements.
Logitech International S.A. | Fiscal 2023 Form 10-K | 66
  Years Ended March 31,
  2016 2015 2014
Cash flows from operating activities:      
Net income $119,317
 $9,283
 $74,304
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation 51,108
 41,304
 48,967
Amortization of other intangible assets 1,885
 8,361
 17,771
Share-based compensation expense 27,351
 25,825
 25,546
Impairment of goodwill and other assets —
 122,734
 —
Impairment of investments —
 2,298
 624
Equity in net income of equity method investees (469) —
 —
Loss (gain) on disposal of property, plant and equipment —
 (44) 4,411
Net gain on divestiture of discontinued operations (13,684) —
 —
Excess tax benefits from share-based compensation (2,084) (2,831) (2,246)
Deferred income taxes 6,604
 2,240
 (4,828)
Changes in assets and liabilities, net of acquisitions:  
  
  
Accounts receivable, net 25,513
 (8,018) (219)
Inventories 31,966
 (60,510) 49,471
Other assets (1,975) (4,284) (1,388)
Accounts payable (58,104) 60,413
 (21,322)
Accrued and other liabilities (4,317) (18,139) 14,330
Net cash provided by operating activities 183,111
 178,632
 205,421
Cash flows from investing activities:  
  
  
Purchases of property, plant and equipment (56,615) (45,253) (46,658)
Investment in privately held companies (2,419) (2,550) (300)
Payments for divestiture of discontinued operations, net of cash sold (1,395) —
 —
Changes in restricted cash (715) —
 —
Acquisitions, net of cash acquired —
 (926) (650)
Proceeds from return of investment from strategic investments —
 —
 261
Purchase of trading investments (9,619) (5,034) (8,450)
Proceeds from sales of trading investments 10,073
 5,474
 8,994
Net cash used in investing activities (60,690) (48,289) (46,803)
Cash flows from financing activities:  
  
  
Payment of cash dividends (85,915) (43,767) (36,123)
Purchases of treasury shares (70,358) (1,663) —
Contingent consideration related to prior acquisition —
 (100) —
Repurchase of ESPP awards —
 (1,078) —
Proceeds from sales of shares upon exercise of options and purchase rights 19,767
 4,138
 16,914
Tax withholdings related to net share settlements of restricted stock units (7,247) (9,215) (5,718)
Excess tax benefits from share-based compensation 2,084
 2,831
 2,246
Net cash used in financing activities (141,669) (48,854) (22,681)
Effect of exchange rate changes on cash and cash equivalents 1,405
 (13,863) (349)
Net increase (decrease) in cash and cash equivalents (17,843) 67,626
 135,588
Cash and cash equivalents at beginning of period 537,038
 469,412
 333,824
Cash and cash equivalents at end of period $519,195
 $537,038
 $469,412
       
Supplementary Cash Flow Disclosures:      
Non-cash investing activities:  
  
  
Property, plant and equipment purchased during the period and included in period end liability accounts $4,958
 $5,242
 $5,204
Fair value of retained cost method investment as a result of divestiture of discontinued operations $5,591
 $—
 $—


Table of Contents
Supplemental cash flow information:  
  
  
Interest paid $—
 $—
 $1,080
Income taxes paid, net $11,499
 $10,838
 $9,189
The following amounts reflected in the consolidated statements of cash flows are included in discontinued operations:
Depreciation $2,207
 $2,562
 $3,402
Amortization of other intangible assets $1,438
 $7,598
 $15,369
Share-based compensation $332
 $1,634
 $2,318
Purchases of property, plant and equipment $1,431
 $3,598
 $4,233
Cash and cash equivalents, beginning of the period $3,659
 $1,894
 $2,326
Cash and cash equivalents, end of the period $—
 $3,659
 $1,894

LOGITECH INTERNATIONAL S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands, except per share amounts)
 Registered sharesAdditional
paid-in
capital		Treasury sharesRetained
earnings		Accumulated
other
comprehensive
loss
 SharesAmountSharesAmountTotal
March 31, 2020173,106 $30,148 $75,097 6,210 $(185,896)$1,690,579 $(120,660)$1,489,268 
Cumulative effect of adoption of new accounting standard— — — — — (553)— (553)
Total comprehensive income— — — — — 947,257 11,745 959,002 
Purchases of registered shares— — — 1,845 (164,952)— — (164,952)
Sale of shares upon exercise of stock options and purchase rights— — 3,130 (1,786)40,680 — — 43,810 
Issuance of shares upon vesting of restricted stock units— — (53,093)(1,080)21,011 — — (32,082)
Issuance of shares from contingent consideration— — 18,847 (390)9,616 — — 28,463 
Share-based compensation— — 85,538 — — — — 85,538 
Cash dividends ($0.87 per share)— — — — — (146,705)— (146,705)
March 31, 2021173,106 $30,148 $129,519 4,799 $(279,541)$2,490,578 $(108,915)$2,261,789 
Total comprehensive income— — — — — 644,513 4,792 649,305 
Purchases of registered shares— — — 4,607 (412,022)— — (412,022)
Sale of shares upon exercise of stock options and purchase rights— — 12,971 (410)16,678 — — 29,649 
Issuance of shares upon vesting of restricted stock units— — (105,972)(1,137)41,816 — — (64,156)
Issuance of shares from contingent consideration— — 116 (4)176 — — 292 
Share-based compensation— — 93,291 — — — — 93,291 
Cash dividends ($0.95 per share)— — — — — (159,410)— (159,410)
March 31, 2022173,106 $30,148 $129,925 7,855 $(632,893)$2,975,681 $(104,123)$2,398,738 
Total comprehensive income— — — — — 364,575 3,846 368,421 
Purchases of registered shares— — — 7,562 (418,346)— — (418,346)
Sale of shares upon exercise of stock options and purchase rights— — (5,636)(686)34,426 — — 28,790 
Issuance of shares upon vesting of restricted stock units— — (68,710)(968)39,547 — — (29,163)
Share-based compensation— — 71,801 — — — — 71,801 
Cash dividends ($1.00 per share)— — — — — (162,681)— (162,681)
March 31, 2023173,106 $30,148 $127,380 13,763 $(977,266)$3,177,575 $(100,277)$2,257,560 
 The accompanying notes are an integral part of these consolidated financial statements.

LOGITECH INTERNATIONAL S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands)
Logitech International S.A. | Fiscal 2023 Form 10-K | 67
 Registered shares 
Additional
paid-in
capital
 Treasury shares 
Retained
earnings
 
Accumulated
other
comprehensive
loss
  
 Shares Amount Shares Amount  Total
March 31, 2013173,106
 $30,148
 $—
 13,855
 $(179,990) $966,924
 $(95,129) $721,953
Total comprehensive income—
 —
 —
 —
 —
 74,304
 9,327
 83,631
Tax effects from share-based awards—
 —
 (2,046) —
 —
 —
 —
 (2,046)
Sale of shares upon exercise of options and purchase rights—
 —
 339
 (2,601) 45,388
 (28,813) —
 16,914
Issuance of shares upon vesting of restricted stock units—
 —
 (23,810) (1,048) 18,092
 —
 —
 (5,718)
Share-based compensation expense—
 —
 25,517
 —
 —
 —
 —
 25,517
Cash dividends—
 —
 —
 —
 —
 (36,123) —
 (36,123)
March 31, 2014173,106
 $30,148
 $—
 10,206
 $(116,510) $976,292
 $(85,802) $804,128
Total comprehensive income (loss)—
 —
 —
 —
 —
 9,283
 (27,435) (18,152)
Purchase of treasury shares—
 —
 —
 115
 (1,663) —
 —
 (1,663)
Tax effects from share-based awards—
 —
 (2,200) —
 —
 —
 —
 (2,200)
Sale of shares upon exercise of options and purchase rights—
 —
 (2,367) (390) 6,505
 —
 —
 4,138
Issuance of shares upon vesting of restricted stock units—
 —
 (20,298) (1,306) 22,717
 (11,634) —
 (9,215)
Share-based compensation expense—
 —
 25,943
 —
 —
 —
 —
 25,943
Repurchase of ESPP awards—
 —
 (1,078) —
 —
 —
 —
 (1,078)
Cash dividends—
 —
 —
 —
 —
 (43,767) —
 (43,767)
March 31, 2015173,106
 $30,148
 $—
 8,625
 $(88,951) $930,174
 $(113,237) $758,134
Total comprehensive income—
 —
 —
 —
 —
 119,317
 1,252
 120,569
Purchase of treasury shares—
 —
 —
 4,951
 (70,358) —
 —
 (70,358)
Tax effects from share-based awards—
 —
 (2,353) —
 —
 —
 —
 (2,353)
Sale of shares upon exercise of options and purchase rights—
 —
 (737) (1,812) 20,504
 —
 —
 19,767
Issuance of shares upon vesting of restricted stock units—
 —
 (17,645) (1,067) 10,398
 

 —
 (7,247)
Share-based compensation expense—
 —
 27,351
 —
 —
 —
 —
 27,351
Cash dividends—
 —
 —
 —
 —
 (85,915) —
 (85,915)
March 31, 2016173,106
 $30,148
 $6,616
 10,697
 $(128,407) $963,576
 $(111,985) $759,948

   The accompanying notes are an integral partTable of these consolidated financial statements.Contents

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1—The Company
Logitech International S.A, together with its consolidated subsidiaries ("Logitech" or the "Company"), designs, manufactures and marketssells products that allowhelp businesses thrive and bring people to connect through music,together when working, creating, gaming video, computing, and other digital platforms.streaming.
The Company sells its products to a broad network of domestic and international customers, including direct sales to retailers, e-tailers and end consumers through the Company's e-commerce platform, and indirect sales to end customers through distributors.
Logitech was founded in Switzerland in 1981 and Logitech International S.A. has been the parent holding company of Logitech since 1988. Logitech International S.A. is a Swiss holding company with its registered office in Apples,Hautemorges, Switzerland and headquarters in Lausanne, Switzerland, which conducts its business through subsidiaries in the Americas, Europe, Middle East and Africa ("EMEA") and Asia Pacific. Shares of Logitech International S.A. are listed on both the SIX Swiss Exchange, under the trading symbol LOGN, and the Nasdaq Global Select Market, under the trading symbol LOGI.
Note 2—Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Logitech and its subsidiaries. All intercompany balances and transactions have been eliminated. The consolidated financial statements are presented in accordance with U.S. GAAP (accountingaccounting principles generally accepted in the United States of America)("U.S. GAAP").
During the third quarter of fiscal year 2016, the Company's Board of Directors approved a plan to divest the Lifesize video conferencing business. On December 28, 2015, the Company and Lifesize, Inc., a wholly owned subsidiary of the Company (“Lifesize”) which holds the assets of the Company’s Lifesize video conferencing business, entered into a stock purchase agreement (the “Stock Purchase Agreement”) with three venture capital firms. Immediately following the December 28, 2015 closing of the transactions contemplated by the Stock Purchase Agreement, the venture capital firms held 62.5% of the outstanding shares of Lifesize, which resulted in a divestiture of the Lifesize video conferencing business by the Company. The disposition of the Lifesize video conferencing business was completed during the fourth quarter of fiscal year 2016, and represents a strategic shift that has a major effect on the Company's operations and financial results. As a result, the Company has classified the results of Lifesize video conferencing business as discontinued operations in its consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with the discontinued operations are classified separately on its consolidated balance sheets for the comparative periods presented herein.

Unless indicated otherwise, the information in the Notes to the consolidated financial statements relates to the Company's continuing operations and does not include results of Lifesize video conferencing business, which is classified as discontinued operations. See "Note 3 - Discontinued Operations" for more information.
Fiscal Year
The Company's fiscal year ends on March 31. Interim quarters are generally thirteen-week periods, each ending on a Friday of each quarter.Friday. For purposes of presentation, the Company has indicated its quarterly periods endingend on the last day of the calendar quarter.
Reference to Sales
References to "sales" in the Notes to the consolidated financial statements means net sales, except as otherwise specified.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements.statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Examples of significantSignificant estimates and assumptions made by management involve the fair value of goodwill warranty liabilities,and intangible assets acquired from business acquisitions, contingent consideration for a business acquisition and periodic reassessment of its fair value, valuation of investment in privately held companies classified under Level 3 fair value hierarchy, pension obligations, accruals for discretionary customer incentives, cooperative marketing, and pricing programs sales return reserves, allowance for doubtful accounts,("Customer Programs") and related breakage when appropriate, inventory valuation, restructuring charges, contingent liabilities, share-based compensation expense, uncertain tax positions, and valuation allowances for deferred tax assets. Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ materially from those estimates.

Risks and Uncertainties
Foreign Impacts of Macroeconomic and Geopolitical Conditions on the Company's Business
In fiscal year 2023, the Company's business was impacted by adverse macroeconomic and geopolitical conditions. These conditions included inflation, foreign currency fluctuations, and slowdown of economic activity around the world, in part due to rising interest rates, and lower consumer and enterprise spending. In addition, the war in Ukraine resulted in global supply chain, logistics, and inflationary challenges. The Company had no revenue in Russia and Ukraine in fiscal year 2023 as it has indefinitely ceased all sales and shipments to Russia and sales in Ukraine have also been halted due to the ongoing military operations on the Ukrainian territory.
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The global and regional economic and political conditions adversely affect demand for the Company's products. These conditions also had an impact on the Company's suppliers, contract manufacturers, logistics providers, and distributors, causing volatility in cost of materials and shipping and transportation rates, and as a result impacting the pricing of the Company's products.
Currencies
The functional currency of the Company's operations is primarily the U.S. Dollar. Certain operations use the Euro, Chinese Renminbi, Swiss Franc, or other local currencies as their functional currencies. The financial statements of the Company's subsidiaries whose functional currency is other than the U.S. Dollar are translated to U.S. Dollars using period-end rates of exchange for assets and liabilities and monthly average rates for net sales, income and expenses. Cumulative translation gains and losses are included as a component of shareholders' equity in accumulated other comprehensive loss.income (loss). Gains and losses arising from transactions denominated in currencies other than a subsidiary's functional currency are reported in other income (expense), net in the consolidated statements of operations.
Revenue Recognition
Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the transaction price the Company expects to receive in exchange for those goods or services.
Substantially all revenue recognized by the Company relates to the contracts with customers to sell products that allow people to connect through gaming, video, computing, music and other digital platforms. These products are hardware devices, which may include embedded software that function together, and are considered as one performance obligation. Hardware devices are generally plug and play, requiring no configuration and little or no installation. Revenue is recognized at a point in time when control of the following criteria are met:
Evidence of an arrangement between the Company and the customer exists;
Delivery has occurred and title and risk of loss hasproducts is transferred to the customer;customer which generally occurs upon shipment. The Company’s sales contracts with its customers have a one year or shorter term. The Company elects not disclosing the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

The Company also provides post-contract customer support (“PCS”) for certain products and related software, which includes unspecified software updates and upgrades, bug fixes and maintenance. The transaction price is allocated to two performance obligations in such contracts, based on a relative standalone selling price. The transaction price allocated to PCS is recognized as revenue on a straight-line basis, which reflects the pattern of delivery of PCS, over the estimated term of the support that is between one to two years. Deferred revenue associated with remaining PCS performance obligation as of March 31, 2023 and March 31, 2022 was not material.

The price of the product is fixed or determinable;Company also recognizes revenue from subscription services that provide professional streamers with access to streaming software and
Collectability of the receivable is reasonably assured.
For sales of most hardware peripherals products and hardware bundled with software essential to its functionality, these criteria tools that represent a single stand-ready performance obligation. Subscriptions are metpaid for at the time delivery has occurredof or in advance of delivering the services. The proceeds received in advance from such arrangements is recognized as deferred revenue and titlethen recognized as revenue ratably over the subscription period.

The Company normally requires payment from customers within thirty to sixty days from the invoice date. However, terms may vary by customer type, by country and riskby selling season. Extended payment terms are sometimes offered to a limited number of loss have transferred tocustomers during the customer.second and third fiscal quarters. The Company generally does not modify payment terms on existing receivables. The Company's contracts with customers do not include significant financing components as the period between the satisfaction of performance obligations and timing of payment are generally within one year.
Revenues
The transaction price received by the Company from sales to its distributors, retail companies ("retailers"), and authorized resellers are recognized upon shipmentis calculated as selling price net of estimatedvariable consideration which may include product returns and expectedthe Company’s payments for cooperative marketing arrangements, customer incentive programs and pricing programs.Customer Programs related to current period product revenue. The estimated costimpact of these programs is recorded as a reduction of salestransaction price or as an operating expense if the Company receives a separately identifiable benefitdistinct good or service from the customer and can reasonably estimate the fair value of that benefit. Significantgood or service received. Customer Programs require management to estimate the percentage of those programs which will not be claimed in the current period or will not be earned by customers, which is commonly referred to as "breakage." Breakage is estimated based on historical claim experience, the period in which customer claims are expected to be submitted, specific terms and conditions with customers and other factors. The Company accounts for breakage as part of variable consideration, subject to constraint, and records the estimated impact in the same
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period when revenue is recognized at the expected value. Assessing the period in which claims are expected to be submitted and the relevance of the historical claim experience require significant management judgment and estimates are used to determineestimate the costbreakage of these programsCustomer Programs in any accounting period.

The Company enters into cooperative marketing arrangements with many of its distribution and retail customers and with certain indirect partners, allowing customers to receive a credit equal to a set percentage of their purchases of the Company's products, or a fixed dollar creditamount for various marketing and incentive programs. The objective of these arrangements is to encourage advertising and promotional events to increase sales of the Company's products. Accruals for these marketing arrangements are recorded at the later of time of sale or time of commitment, based on negotiated terms, historical experience and inventory levels in the channel.
Customer incentive programs include consumer rebaterebates and performance-based incentives. The Company offers performance-based incentives to its distribution customers, retail customers and indirect partners based on pre-determined performance criteria. Accruals for performance-based incentives are recognized as a reduction of the sale price at the time of sale. Estimates of required accruals are determined based on negotiated terms, consideration of historical experience, anticipated volume of future purchases, and inventory levels in the channel. Consumer rebates are offered from time to timethe Company's customers and indirect partners at the Company's discretion for the primary benefit of end-users. Accruals forIn addition, the estimated costs of consumer rebates and similarCompany offers performance-based incentives are recorded at the later of time of sale or when the incentive is offered, based on the specific terms and conditions. Certain incentive programs, including consumer rebates, require management to estimate the number of customers who will actually redeem the incentive based on historical experience and the specific terms and conditions of particular programs.
The Company has agreements with certainmany of its customers that contain terms allowing price protection credits to be issued in the event of a subsequent price reduction.and indirect partners based on predetermined performance criteria. At management's discretion, the Company also offers special pricing discounts to certain customers. Special pricing discounts are usually offered only for limited time periods or for sales of selected products to specific indirect partners.

Cooperative marketing arrangements and customer incentive programs are considered variable consideration, which the Company estimates and records as a reduction to revenue at the time of sale based on negotiated terms, historical experiences, forecasted incentives, anticipated volume of future purchases, and inventory levels in the channel.

The Company has agreements with certain customers that contain terms allowing price protection credits to be issued in the event of a subsequent price reduction. Management's decision to make price reductions is influenced by product life cycle stage, market acceptance of products, the competitive environment, new product introductions and other factors.

Accruals for estimated expected future pricing actions and Customer Programs are recognized at the time of sale based on analyses of historical pricing actions by customer and by products,product, inventories owned by and located at distributors and retailers,customers, current customer demand, current operating conditions, and other relevant customer and product information, such as stage of product life-cycle.
The Company grants limited rights to
Product return products. Return rights vary by customer, and range from just the right to return defective product to stock rotation rights limited to a percentage of sales approved by management.customer. Estimates of expected future product returns qualify as variable consideration and are recognizedrecorded as a reduction of the transaction price of the contract at the time of sale based on an analyses of historical

return trends by customer and by product, inventories owned by and located at distributors and retailers,customers, current customer demand, current operating conditions, and other relevant customer and product information. Upon recognition, theThe Company reduces sales and cost of sales forassesses the estimated return.asset for recovery value for impairment and adjusts the value of the asset for any impairment. Return trends are influenced by product life cycle status, new product introductions, market acceptance of products, sales levels, product sell-through, the type of customer, seasonality, product quality issues, competitive pressures, operational policies and procedures, and other factors.
Return rates can fluctuate over time but are sufficiently predictable to allow the Company to estimate expected future product returns.

Typically, variable consideration does not need to be constrained as estimates are based on predictive historical data or future commitments that are planned and controlled by the Company. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur.

The Company regularly evaluates the adequacy of its estimates for cooperative marketing arrangements, customer incentive programs and pricing programs,Customer Programs and product returns. Future market conditions and product transitions may require the Company to take action to change such programs. In addition, whenprograms and related estimates. When the variables used to estimate these costs change, or if actual costs differ significantly from the estimates, the Company would be required to record incremental increasesincrease or reductions to sales, cost of goods soldreduce revenue or operating expenses. If, at any future time,expenses to reflect the Company becomes unableimpact. During the year ended March 31, 2023, changes to reasonably estimate these costs, recognitionestimates related to performance obligations satisfied in prior periods were not material.

Sales taxes and value-added taxes (“VAT”) collected from customers, if applicable, which are remitted to governmental authorities are not included in revenue, and are reflected as a liability on the consolidated balance sheets.
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Shipping and Handling Costs
The Company's shipping and handling costs are included in the cost of salesgoods sold in the consolidated statements of operations for all periods presented.
Contract Balances
The Company records accounts receivable from contracts with customers when it has an unconditional right to consideration, as accounts receivable, net on the consolidated balance sheets.
The Company records contract liabilities when cash payments are received or due in advance of performance, primarily for implied support and subscriptions. Contract liabilities are included in accrued and other current liabilities and other non-current liabilities on the consolidated balance sheets.
As of March 31, 2023 and 2022, the Company did not have any material contract liabilities balances or changes.
Contract Costs
The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in marketing and selling expenses in the consolidated statements of operations. As of March 31, 2023 and 2022, the Company did not have any material deferred contract costs.
Research and Development Costs
Costs related to research, design and development of products, which consist primarily of personnel, product design and infrastructure expenses, are charged to research and development expense as they are incurred.
Advertising Costs
Advertising costs are expensed as incurred. Advertising costs are recorded as either a marketing and selling expense or a deduction from revenue.revenue as they are incurred. Advertising costs paid or reimbursed by the Company to direct or indirect customers must have an identifiable benefit and an estimable fair value in order to be classified as an operating expense. If these criteria are not met, the costpayment is classified as a reduction of revenue. Advertising costs recorded as marketing and selling expense are expensed as incurred. Total advertising costs including those characterized as revenue deductions during fiscal years 2016, 20152023, 2022 and 20142021 were $181.7$341.1 million, $165.7$628.9 million and $156.8$450.0 million, respectively.respectively, out of which $24.8 million, $267.8 million, and $168.2 million, respectively, were included as operating expense in the consolidated statements of operations.
Cash Equivalents
The Company considersclassifies all highly liquid instruments purchased, such as bank time deposits, with an original maturity of three months or less at the date of purchase, to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.
All of the Company's bank time deposits have an original maturity of three months or less and are classified as cash equivalents and are recorded at cost, which approximatestheir fair value.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with various creditworthy financial institutions and has a policy to limit exposure with any one financial institution, but is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with individual financial institutions are in excess of amounts that are insured. The Company periodically assesses the credit risk associated with these financial institutions.
The Company sells to large distributors, retailers, and retailerse-tailers and, as a result, maintains individually significant receivable balances with such customers. In fiscal years 2016, 2015 and 2014, one customer represented 14%, 15% and 15%
The Company had the following customers that individually comprised 10% or more of theits gross sales:
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 Years Ended March 31,
 202320222021
Customer A13 %15 %14 %
Customer B19 %17 %13 %
Customer C (1)
15 %14 %
N/A(1)
(1) The Company's total net sales. Intwo customers merged during fiscal year 2016, another2022 and the percentages for fiscal year 2023 and 2022 reflect the gross sales to the combined company. The percentage for fiscal year 2021 is not disclosed as gross sales to each customer accounted for 10% of the Company's net sales. No other customer represented moreless than 10% of the Company's total net sales during fiscal years 2016, 2015 or 2014. As of March 31, 2016 and 2015, one customer represented 15% and 13% of total accounts receivable, respectively. Typical payment terms require customers to pay for product sales generally within 30 to 60 days; however terms may vary by customer type, by country and by selling season. Extended payment terms are sometimes offered to a limited number of customers during the second and third fiscal quarters. gross sales.
The Company does not modify payment terms on existing receivables.had the following customers that individually comprised 10% or more of its accounts receivable:
 March 31,
 20232022
Customer A12 %15 %
Customer B21 %17 %
Customer C15 %15 %
The Company manages its accounts receivable credit risk through ongoing credit evaluation of its customers' financial condition.conditions. The Company generally does not require collateral from its customers.

Allowances for Doubtful Accounts
Allowances for doubtful accounts are maintained for estimatedexpected credit losses resulting from the inability of the Company's customerscustomers' inability to make required payments. The allowances are based on the Company's regular assessment of various factors, including the credit worthinesscredit-worthiness and financial condition of specific customers, as well as its historical experience with bad debts and customer deductions, receivables aging, current economic trends, geographic or country-specific risksconditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the financial condition of its distribution channels.Company's ability to collect from customers.
Inventories
Inventories are stated at the lower of cost or market.and net realizable value. Costs are computed under the standard cost method, which approximates actual costs determined on the first-in, first-out basis. The Company records write-downs of inventories which are obsolete or in excess of anticipated demand or marketnet realizable value based on a consideration of marketability and product life cycle stage, product development plans, component cost trends, historical sales and demand forecasts historical net sales, andwhich consider the assumptions about future demand and market conditions.
As of March 31, 2016 Inventory on hand which is not expected to be sold or utilized is considered excess, and 2015, the Company alsorecognizes the write-down in cost of goods sold at the time of such determination. The write-down is determined by the excess of cost over net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the time of loss recognition, new cost basis per unit and lower-cost basis for that inventory are established and subsequent changes in facts and circumstances would not result in an increase in the cost basis.
The Company recorded a liability of $8.5 million and $9.8 million, respectively,liabilities arising from firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or marketnet realizable value consistent with its valuation of excess and obsolete inventory. Such liability is included in accrued and other current liabilities.liabilities on the consolidated balance sheets.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Additions and improvements are capitalized, and maintenance and repairs are expensed as incurred. The Company capitalizes the cost of software developed for internal use in connection with major projects. Costs incurred during the feasibilitypreliminary project stage and post implementation stage are expensed, whereas direct costs incurred during the application development stage are capitalized.
Depreciation expense is providedrecognized using the straight-line method. Plant and buildings are depreciated over estimated useful lives from ten toof twenty-five years, equipment over useful lives from three to five years, internal-use
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software development over useful lives of from three to seventen years, tooling over useful lives from six months to one year, and leasehold improvements over the lesser of the useful life of the improvement or the term of the lease.lease or ten years.
When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are relieved from the accounts and the net gain or loss is included in cost of goods sold or operating expenses.expenses, depending on the nature of the property and equipment.
ValuationLeases
The Company determines if an arrangement is a lease or contains a lease at contract inception. The Company determines if a lease is an operating or finance lease and recognizes right-of-use ("ROU") assets and lease liabilities upon lease commencement. Operating lease ROU assets are included in other assets, short-term lease liabilities are included in accrued and other current liabilities, and long-term lease liabilities are included in other non-current liabilities on the Company's consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the balance sheet. For the Company's operating leases, the Company accounts for the lease component and related non-lease component as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

For operating leases, the lease liability is initially measured at the present value of the unpaid lease payments at lease commencement date. As most of the leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate as the discount rate for the leases. The Company's incremental borrowing rate is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because the Company does not generally borrow in a collateralized basis, it uses its understanding of what its collateralized credit rating would be as an input to deriving an appropriate incremental borrowing rate. The operating lease ROU assets include prepaid lease payments and exclude lease incentives.
Intangible Assets
The Company's intangible assets principally include goodwill, acquired technology, trademarks, and customer contracts and related relationships. Intangible assets with finite lives, which include acquired technology, trademarks, customer contracts and related relationships, and others are carried at cost and amortized using the straight-line method over their useful lives ranging from one to ten years. Intangible assets with indefinite lives, which include only goodwill and in-process research and development ("IPR&D"), are recorded at cost and evaluated at least annually for impairment. IPR&D is reclassified as intangible assets with finite lives and amortized over its estimated useful life upon completion of the underlying projects.
Impairment of Long-Lived Assets
The Company reviews long-lived assets, such as property and equipment, and finite-lived intangible assets, for impairment whenever events indicate that the carrying amounts might not be recoverable. Recoverability of property and equipment, and other finite-lived intangible assetlong-lived assets is measured by comparing the projected undiscounted net cash flows associated with those assets to their carrying values. If an asset is considered impaired, it is written down to its fair value, which is determined based on the asset's projected discounted cash flows or appraised value, depending on the nature of the asset. For purposes of recognition of an impairment for assets held for use, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable.
Impairment of Goodwill and Other Intangible Assets
The Company's intangible assets principally include goodwill, acquired technology, trademarks, and customer contracts. Other intangible assets with finite lives, which include acquired technology, trademarks and customer contracts, and other are recorded at cost and amortized using the straight-line method over their useful lives ranging from one year to ten years. Intangible assets with indefinite lives, which include only goodwill, are recorded at cost and evaluated at least annually for impairment.


Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. The Company conducts a goodwill impairment analysis annually at December 31 or more frequently if indicators of impairment exist or if a decision is made to sell or exit a business. A significant amount of judgment isSignificant judgments are involved in determining if an indicator of impairment has occurred. Such indicators may include deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill.

In reviewing goodwill for impairment, an entitythe Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (greater than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the two-step quantitative impairment test, otherwise no further analysis is required. An entityThe Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the two-step quantitative
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impairment test. The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether an entitythe Company chooses to perform the qualitative assessment or proceeds directly to the two-step quantitative impairment test.

Long-lived intangible assets are tested for recoverability whenever events or changes in circumstances indicate The Company operates as one reporting unit. For the year ended March 31, 2023, the Company elected to perform a qualitative assessment and concluded that theirit was more likely than not that the fair value of its reporting unit exceeds its carrying amounts may not be recoverable.amount.
Income Taxes
The Company provides for income taxes using the asset and liability method, which requires that deferred tax assets and liabilities be recognized for the expected future tax consequences of temporary differences resulting from differing treatment of items for tax and accounting purposes.financial reporting purposes, and for operating losses and tax credit carryforwards. In estimating future tax consequences, expected future events are taken into consideration, with the exception of potential tax law or tax rate changes. The Company records a valuation allowance to reduce deferred tax assets to amounts management believes are more likely than not to be realized.
The Company's assessment of uncertain tax positions requires that management makes estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company's estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur. Such adjustments may have a material impact on the Company's income tax provision and its results of operations.
Fair Value of Financial Instruments
The carrying value of certain of the Company's financial instruments, including cash equivalents, accounts receivable and accounts payable approximates their fair value due to their short maturities.
The Company's investment securities portfolio consists of bank time deposits with an original maturity of three months or less and marketable securities (money market and mutual funds) related to a deferred compensation plan.
The Company's trading investments related to the deferred compensation plan are reported at fair value based on quoted market prices. The marketable securities related to the deferred compensation plan are classified as non-current trading investments, as they are intended to fund the deferred compensation planplan's long-term liability. Since participantsParticipants in the deferred compensation plan may select the mutual funds in which their compensation deferrals are invested within the confines of the Rabbi Trust which holds the marketable securities, the Company has designated these marketable securities as trading investments, although there is no intent to actively buy and sell securities within the objective of generating profits on short-term differences in market prices.securities. These securities are recorded at fair value based on quoted market prices. Earnings, gains and losses on tradingdeferred compensation investments are included in other income (expense), net.net in the consolidated statements of operations.
The Company also holds certain non-marketable investments in equity and other securities that are accounted for as either cost or equity method investments which are classified asand included in other assets. The cost method investment is initially recognized atassets in the consolidated balance sheets. In addition, the Company has certain equity investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value which represents a Level 3 valuation as the assumptions used in valuing this investment were not directly or indirectly observable.are unobservable and require management's judgment. The Company reviewselected the fair valuemeasurement alternative to record these investments at cost and to adjust for impairments and observable price changes resulting from transactions with the same issuer within the statements of its non-marketable investments on a regular basis to determine whether the investments in these companies are other-than-temporarily impaired. The Company

considers investee financial performance and other information received from the investee companies, as well as any other available estimates of the fair value of the investee companies in its review. If the Company determines the carrying value of an investment exceeds its fair value, and that difference is other than temporary, the Company writes down the value of the investment to its fair value. The fair value of cost investments is not adjusted if there are no identified adverse events or changes in circumstances that may have a material effect on the fair value of the investments.operations.
Net Income (Loss) per Share
Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average outstanding shares. Diluted net income (loss) per share is computed using the weighted average outstanding shares and dilutive share equivalents. Dilutive share equivalents consist of share-based awards, including stock options, purchase rights under employee share purchase plan, and restricted stock units ("RSUs").units.
The dilutive effect of in-the-money share-based compensation awards is calculated based on the average share price for each fiscal period using the treasury stock method, which assumes that the amount used to repurchase shares includes the amount the employee must pay for exercising share-based awards, the amount of compensation cost not yet recognized for future service, and the amount of tax impact that would be recorded in additional paid-in capital when the award becomes deductible. The dilutive securities are excluded from the computation of diluted net loss per share from continuing operations as their effect would be anti-dilutive.method.
Share-Based Compensation Expense
Share-based compensation expense includes compensation expense reduced for estimated forfeitures, for share-based awards granted based on the grant date fair value. The grant date fair value for stock options and stock purchase rights is estimated using the Black-Scholes-Merton option-pricing valuation model. The grant date fair value of RSUs which vest upon meeting certain market conditions is estimated using the Monte-Carlo simulation method. The grant date fair value of time-based and performance-based RSUsservice-based restricted stock units ("RSUs") is calculated based on the market price on the date of grant, adjustedreduced by estimated dividendsdividend yield
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prior to vesting. With respect to awards with serviceThe grant date fair value of restricted stock units which vest upon meeting certain market- and performance-based conditions only,("PSUs") is estimated using the Monte-Carlo simulation method including the effect of the market condition. Stock-based compensation expense is recognized ratably over the vesting periodrespective requisite service periods of the awards.
Excess tax benefits resulting from share-based awards and forfeitures are classified as cash flows from financing activities inaccounted for when they occur. For PSUs, the consolidated statementsCompany recognizes compensation expense using its estimate of cash flows. Excess tax benefits are realized tax benefits from tax deductions for exercised options and vested RSUs in excessprobable outcome at the end of the deferred tax asset attributable to share-based compensation costs for such share-based awards.
performance period (i.e., the estimated performance against the performance targets). The Company will recognize a benefit from share-basedperiodically adjusts the cumulative stock-based compensation expense recorded when the probable outcome for the PSUs is updated based upon changes in additional paid-in capital only if an incremental tax benefit is realized after all other available tax attributes have been utilized.actual and forecasted financial results.
Product Warranty Accrual
All of the Company's products are covered by standard warranty to be free from defects in material and workmanship for periods ranging from one year to three years. The warranty period varies by product and by region. The Company’s standard warranty does not provide a service beyond assuring that the product complies with agreed-upon specifications and is not sold separately. The standard warranty the Company provides qualifies as an assurance warranty and is not treated as a separate performance obligation. The Company estimates cost of product warranties at the time the related revenue is recognized based on historical and projected warranty claim rates, historical and projected costs, and knowledge of specific product failures that are outside of the Company's typical experience. The Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation. Each quarter, the Company reevaluates estimates to assess the adequacy of recorded warranty liabilities consideringliabilities. When the size ofCompany experiences changes in warranty claim activity or costs associated with fulfilling those claims, the installed base of products subject to warranty protection and adjusts the amounts as necessary. If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty liabilities would be required and could materially affect the Company's results of operations.liability is adjusted accordingly.
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the total change in shareholders' equity during the period other than from transactions with shareholders. Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) is comprised of currency translation adjustments from those entities not using the U.S. Dollar as their functional currency, unrealized gains and losses on marketable equity securities, net deferred gains and losses and prior service costs and credits for defined benefit pension plans, and net deferred gains and losses on hedging activity.

Treasury Shares
The Company periodically repurchases shares in the market at fair value. Treasury sharesShares repurchased are recorded at cost as a reduction of total shareholders' equity. Treasury shares held may be reissued to satisfy the exercise of employee stock options and purchase rights, the vesting of restricted stock units, and acquisitions, or may be cancelledcanceled with shareholder approval. Treasury shares that are reissued are accounted for using the first-in, first-out basis.
Derivative Financial Instruments
The Company enters into foreign exchange forward contracts to reduce the short-term effects of currency fluctuations on certain foreign currency receivables or payables and to hedge against exposure to changes in currency exchange rates related to its subsidiaries' forecasted inventory purchases. These
Gains or losses from changes in the fair value of forward contracts generally mature within four months.that offset transaction losses or gains on foreign currency receivables or payables are recognized immediately and included in other income (expense), net in the consolidated statements of operations.
Gains and losses for changes in the fair value of the effective portion of the Company's forward contracts related to forecasted inventory purchases are deferred as a component of accumulated other comprehensive income (loss)loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. Gains or losses for changesThe Company presents the earnings impact from forward points in the fair value on forward contractssame line item that offset translation losses or gains on foreign currency receivables or payables are recognized immediately and included in other income (expense), net.is used to present the earnings impact of the hedged item (i.e. cost of goods sold) for hedging forecasted inventory purchases.
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Table of Contents
Restructuring Charges
The Company's restructuring charges consist of employee severance, one-time termination benefits and ongoing benefits related to the reduction of its workforce, lease exit costs, and other costs. Liabilities for costs associated with a restructuring activity are measured at fair value and are recognized when the liability is incurred, as opposed to when management commits to a restructuring plan. One-time termination benefits are expensed at the date the entity notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Ongoing benefits are expensed when restructuring activities are probable and the benefit amounts are estimable. Costs to terminate a lease before the end of its term are recognized when the property is vacated. Other costs primarily consist of legal, consulting, and other costs related to employee terminations, and are expensed when incurred. Termination benefits are calculated based on regional benefit practices and local statutory requirements.
Segments
ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The guidance defines reportable segments as operating segments that meet certain quantitative thresholds. As a result of the disposition of the Lifesize video conferencing business on December 28, 2015 described above, the composition of the Company's previously reported segments changed significantly, such that the remaining peripheral segment is the only segment reported in continuing operations.
Recent Accounting Pronouncements Adopted
In April 2014,October 2021, the FASBFinancial Accounting Standard Board issued Accounting Standards Update 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU No. 2014-08, "Presentation of Financial Statements (Topic 205)2021-08"). The update requires an acquirer in a business combination to recognize and Property, Plantmeasure contract assets and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". This new standard raisescontract liabilities acquired in a business combination in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, as if it had originated the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation.contracts. The standard is effective prospectively for years beginning on or after December 15, 2014, with early application permitted. The Company adopted ASU No. 2014-08 on April 1, 2015 on a prospective basis and applied the guidance to its disposition of the Lifesize video conferencing business.

In May 2014, the FASB issued ASU No. 2014-9, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-9"). ASU 2014-9 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the

nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 was originally to be effective for the Company on April 1, 2017. In July 2015, the FASB affirmed a one-year deferral of the effective date of the new revenue standard. The new standard will become effective for the Company on April 1, 2018. Early application is permitted but not before the original effective date of annual periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company has not yet selected a transition method nor has it determined whether it will early adopt this guidance or the impact of the new standard on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory (Topic 330)", ("ASU 2015-11"). Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market, with market value represented by replacement cost, net realizable value or net realizable value less a normal profit margin. The amendments in ASU 2015-11 require an entity to measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective in the first quarter of fiscal year 2018 for the Company, with early adoption permitted. The Company does not expect to early adopt this guidance and does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In November 2015, FASB issued ASU No. 2015-17, “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes” ("ASU 2015-17"). The guidance eliminates the current requirement for an entity to separate deferred income tax liabilities and assets into current and non-current amounts in a classified balance sheet. Instead, the guidance requires deferred tax liabilities, deferred tax assets and valuation allowances be classified as non-current in a classified balance sheet. The ASU is effective for annual reporting periods beginning after December 15, 2016years, and interim periods within those annual periods. Early adoption is permitted. The Company has early adopted the guidance in the fourth quarter of fiscal year 2016 on a prospective basis. Prior periods are therefore not adjusted.

In January 2016, FASB issued ASU 2016-01 “Financial Instruments- Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10)”, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in net income. This guidance is effective for fiscal years, beginning after December 15, 2017, including interim periods within those fiscal years.2022. The Company does not expectearly adopted the standard effective April 1, 2022 and applied the standard prospectively to early adopt this guidance and does not believebusiness combinations that theoccurred on or after April 1, 2022. The adoption of this guidance willASU 2021-08 did not have a material impact on itsthe Company's consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)", which requires the recognition of lease assets and lease liabilities arising from operating leases in the statement of financial position. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the full effect that ASU 2016-02 will have on its consolidated financial statements and will adopt the standard effective April 1, 2019.

In March 2016, the FASB issued ASU 2016-09 "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting". The amendment simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. The Company is evaluating the effect that ASU 2016-09 will have on its consolidated financial statements and the timing of the adoption of this standard.

Note 3 - Discontinued Operations3—Net Income Per Share

During the third quarter of fiscal year 2016, the Company's Board of Directors approved a plan to divest the Lifesize video conferencing business. On December 28, 2015 during the fourth quarter of fiscal year 2016, Logitech International S.A. (the "Company"), and Lifesize, Inc., a wholly owned subsidiary of the Company (“Lifesize”) which holds the assets of the Company’s video conferencing reportable segment, entered into a stock purchase agreement (the “Stock Purchase Agreement”) with entities affiliated with three venture capital investment firms (the

"Venture Investors"). Pursuant to the terms of the Stock Purchase Agreement, the Company sold 2,500,000 shares of Series B Preferred Stock of Lifesize to the Venture Investors for cash proceeds of $2,500,000 and retained 12,000,000 non-voting shares of Series A Preferred Stock of Lifesize. The shares of Series A Preferred Stock of Lifesize retained by the Company represent 37.5% of the shares outstanding immediately after the closing of the transactions contemplated by the Stock Purchase Agreement (the “Closing”). Lifesize also issued 17,500,000 shares of Series B Preferred Stock to the Venture Investors for cash proceeds of $17,500,000. The shares of Series B Preferred Stock held by the Venture Investors represent 62.5% of the shares outstanding immediately after the Closing. In addition, Lifesize has reserved 8,000,000 shares of common stock for issuance pursuant to a stock plan to be adopted by Lifesize following the Closing (the “Employee Pool”), none of which are issued or outstanding at the Closing. Post the divestiture, continuing involvement with the discontinued operations includes certain customary services and support which are expected to be provided to Lifesize during the transition period from December 28, 2015 until approximately the end of the third quarter of fiscal year 2017.

The Company has classified the results of its Lifesize video conferencing business as discontinued operations in its consolidated statement of operations for all periods presented since the disposition of the Lifesize video conferencing business represents a strategic shift as that has a major effect on the Company's operations and financial results. Additionally, the related assets and liabilities associated with the discontinued operations are classified separately in the assets and liability on its consolidated balance sheets for all periods presented. Evaluating whether the disposal of the business represents a strategic shift requires the Company's judgment. Also, evaluating whether the strategic shift will have a "major effect" on the Company's operations and financial results requires assessing not only quantitative factors but also the magnitude of qualitative factors.

The retained Series A Preferred Stock gives the Company no voting rights or any other significant influence over the disposed Lifesize video conferencing business, and therefore is accounted for as a cost method investment which is initially recognized at fair value of $5.6 million at the date of disposition of Lifesize Video Conferencing business. The fair value was determined by using the option pricing methodology with reference to the price of Lifesize’s Series B Preferred Stock paid by Venture Investors. The fair value of the Company’s investment in Series A Preferred Stock is classified as Level 3 as application of the option pricing methodology requires use of significant unobservable inputs including asset volatility of 50%, expected term to exit of three years, and lack of marketability discount of 27%.
Discontinued operations include results of the Lifesize video conferencing business. Discontinued operations also include other costs incurred by Logitech to effect the divestiture of the Lifesize video conferencing business. These costs include transaction charges, advisory and consulting fees and restructuring cost related to the Lifesize video conferencing business.


The following table presents financial results ofsummarizes the video conferencing classified as discontinued operations (in thousands):

  Years Ended March 31,
  2016 2015 2014
Net sales $65,554
 $109,039
 $120,684
Cost of goods sold 24,951
 40,299
 54,355
Gross profit 40,603
 68,740
 66,329
Operating expenses: 

 

 

Marketing and selling 32,260
 56,856
 57,040
Research and development 16,526
 22,706
 26,939
General and administrative 5,254
 5,439
 6,251
Impairment of goodwill (#) —
 122,734
 —
Restructuring charges (credits), net 7,900
 (111) 5,810
Operating expenses 61,940
 207,624
 96,040
Operating loss from discontinued operations (21,337) (138,884) (29,711)
Interest expense and other, net 205
 426
 11
Gain on disposal of discontinued operations 13,684
 —
 —
Loss from discontinued operations before income taxes (7,858) (139,310) (29,722)
Provision for (benefit from) income taxes
 1,187
 (164) 1,965
Net loss from discontinued operations $(9,045) $(139,146) $(31,687)

(#) The Company recognized $122.7 million impairment of goodwill in its discontinued operations as result of its impairment analysis as of March 31, 2015. Refer to the Company's Annual Report on Form 10-K for fiscal year 2015.

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities removed from the consolidated balance sheet immediately before the disposition and assets liabilities of discontinued operations as of March 31, 2015 (in thousands):
  Immediately before the disposition March 31,
2015
Carrying amounts of assets included as part of discontinued operations: 
  
Cash and cash equivalents $3,895
 $3,659
Accounts receivable, net 10,360
 12,627
Inventories 12,708
 14,749
Other current assets 1,930
 1,067
Total current assets 28,893
 32,102
Property, plant and equipment, net 3,962
 5,115
Other assets 1,125
 2,521
Total non-current assets 5,087
 7,636
Total assets classified as assets from discontinued operations on the consolidated balance sheets $33,980
 $39,738

    
Carrying amounts of liabilities included as part of discontinued operations:    
Accounts payable $2,382
 $7,198
Accrued and other current liabilities 31,664
 31,568
Total current liabilities 34,046
 38,766
Non-current liabilities 9,915
 10,337
Total liabilities classified as liabilities from discontinued operations on the consolidated balance sheets $43,961
 $49,103
The Company recognized a gain on its divestiture of Lifesize video conferencing business as follows (in thousands):
  Year Ended
  March 31, 2016
Proceeds received from disposition of discontinued operations $2,500
Fair value of retained cost method investment as a result of divestiture of discontinued operations 5,591
Net liabilities of discontinued operations disposed 9,981
Currency translation loss released due to disposition of discontinued operations (1) (3,913)
Transaction related costs (475)
Gain on disposal of discontinued operations (2) $13,684
(1)Currency translation loss recognized as a result of substantial liquidation of a subsidiary using non-USD functional currency, which is part of discontinued operations
(2)Gain on disposal of discontinued operation was included in loss from discontinued operations, net of income taxes, in the Company's consolidated statement of operations


Note 4—Net Income (Loss) per Share
The computations of basic and diluted net income (loss) per share for the Company were as followsfiscal years 2023, 2022 and 2021 (in thousands except per share amounts):
 Years Ended March 31,
 202320222021
Net income$364,575 $644,513 $947,257 
Shares used in net income per share computation:
Weighted average shares outstanding - basic162,302 167,447 168,523 
Effect of potentially dilutive equivalent shares1,402 2,967 3,252 
Weighted average shares outstanding - diluted163,704 170,414 171,775 
   
Net income per share:
Basic$2.25 $3.85 $5.62 
Diluted$2.23 $3.78 $5.51 
  Years Ended March 31,
  2016 2015 2014
Net Income (loss):      
Continuing operations $128,362
 $148,429
 $105,991
Discontinued operations (9,045) (139,146) (31,687)
Net income $119,317
 $9,283
 $74,304
       
Shares used in net income (loss) per share computation:      
Weighted average shares outstanding - basic 163,296
 163,536
 160,619
Effect of potentially dilutive equivalent shares 2,496
 2,638
 1,907
Weighted average shares outstanding - diluted 165,792
 166,174
 162,526
   
  
  
Net income (loss) per share - basic:      
Continuing operations $0.79
 $0.91
 $0.66
Discontinued operations $(0.06) $(0.85) $(0.20)
Net income per share - basic $0.73
 $0.06
 $0.46
       
Net income (loss) per share - diluted:      
Continuing operations $0.77
 $0.89
 $0.65
Discontinued operations $(0.05) $(0.83) $(0.19)
Net income per share - diluted $0.72
 $0.06
 $0.46
During fiscal years 2016, 2015 and 2014, 5.2 million, 9.0 million and 15.1 million shareShare equivalents attributable to outstanding stock options, RSUs, PSUs and ESPP employee share purchase plans ("ESPP") totaling 2.0 million, 2.0 million, and 0.1 million shares during fiscal years 2023, 2022 and 2021, respectively,were excluded from the calculation of diluted net income (loss) per share because the combined exercise price, average unamortized fair value and assumed tax benefits upon exercise of these options and ESPP or vesting of RSUs were greater than the average market price of the Company's shares, and therefore their inclusioneffect would have been anti-dilutive.
For fiscal years 2023 and 2022, a small number of performance-based awards were not included in the dilutive net income per share calculation because all necessary conditions had not been satisfied by the end of the respective period, and those shares were not issuable if the end of the reporting period were the end of the performance contingency period.
Note 5—4—Employee Benefit Plans
Employee Share Purchase Plans and Stock Incentive PlansStock-Based Compensation
As of March 31, 2016,2023, the Company offers the 2006 ESPP (2006 Employee Share Purchase Plan (Non-U.S.)), as amended and restated ("2006 ESPP)", the 1996 ESPP (1996 Employee Share Purchase Plan (U.S.), as amended and restated ("1996 ESPP"), and the 2006 Plan (2006 Stock Incentive Plan)Plan ("2006 Plan") as amended and the 2012 Plan (2012 Stock Inducement Equity Plan).restated. Shares issued to employees as a result of purchases or exercises under these plans are generally issued from shares held in treasury stock.

Logitech International S.A. | Fiscal 2023 Form 10-K | 76

The following table summarizes share-based compensation expense and related tax benefit recognized for fiscal years 2016, 2015 and 2014 (in thousands):
Table of Contents
  Years Ended March 31,
  2016 2015 2014
Cost of goods sold $2,340
 $2,474
 $2,518
Marketing and selling 9,273
 8,570
 7,848
Research and development 3,046
 2,381
 2,811
General and administrative 12,353
 10,766
 10,051
Restructuring 7
 —
 —
Total share-based compensation expense 27,019
 24,191
 23,228
Income tax benefit (6,297) (4,814) (4,447)
Total share-based compensation expense, net of income tax $20,722
 $19,377
 $18,781
As of March 31, 2016, 2015 and 2014, the Company capitalized $0.5 million, $0.5 million and $0.4 million, respectively, of stock-based compensation expenses as inventory.
The following table summarizes total unamortized share-based compensation expense and the remaining months over which such expense is expected to be recognized, on a weighted-average basis by type of grant (in thousands, except number of months):
  March 31, 2016
  
Unamortized
Expense
 
Remaining
Months
Stock options and ESPP $964
 4
Time-based RSUs 25,734
 22
Market-based and performance-based RSUs 9,529
 18
  $36,227
  
Under the 1996 ESPP and 2006 ESPP plans, eligible employees may purchase shares at the lower of 85% of the fair market value at the beginning or the end of each offering period, which is generally six months. Subject to continued participation in these plans, purchase agreements are automatically executed at the end of each offering period. An aggregate of 2929.0 million shares waswere reserved for issuance under the 1996 and 2006 ESPP plans. As of March 31, 2016,2023, a total of 7.2of 3.6 million shares shares were available for issuancenew awards under these plans. The Company was not current with its periodic reports required to be filed with the SEC and was therefore unable to issue any shares under its Registration Statements on Form S-8 from July 31, 2014 to November 26, 2014. Given the proximity of the unavailability of those registration statements and the end of the then-current ESPP offering period, on July 31, 2014, the Compensation Committee authorized the termination of the then-current ESPP offering period and a one-time payment to each participant in an amount equal to the fifteen percent (15%) discount at which shares would otherwise have been repurchased pursuant to the then-current period of the ESPPs. This one-time payment aggregating to $1.1 million was accounted for as a repurchase of equity awards that reduced additional paid-in capital, resulting in no additional compensation cost. A new ESPP offering period of seven months was initiated on January 1, 2015, which ended on July 31, 2015. Subsequent to that, the offering periods have returned to standard six months.
The 2006 Plan provides for the grant to eligible employees and non-employee directors of stock options, stock appreciation rights, and restricted stock and RSUs.units. Awards under the 2006 Plan may be conditioned on continued employment, the passage of time or the satisfaction of performance and market vesting criteria. The 2006 Plan, had anas amended, has no expiration date ofdate. On June 16, 2016 until September 5, 2012 when shareholder approved29, 2022, the amendment ofBoard authorized 3.3 million additional shares for issuance under the 2006 Plan to eliminatePlan. An aggregate of 33.8 million shares were reserved for issuance under the expiration date. All stock options2006 Plan. As of March 31, 2023, a total of 8.4 million shares were available for new awards under this planplan.
Stock options granted to employees under the 2006 Plan have terms not exceeding ten years and are issued at exercise prices not less than the fair market value on the date of grant.
Time-based RSUsService-based restricted stock units ("RSUs") granted to employees under the 2006 Plan generally vest in four equal annual installments on the grant date anniversary. Time-based RSUs granted to non-executive board members under the 2006 Plan vest in one annual installment on the grant date anniversary. Performance-based RSUsanniversary, or if earlier and only if the non-executive board member is not re-elected as a director at such annual general meeting, the date of the next annual general meeting following the grant date.
Restricted stock units with certain market- and performance-based conditions ("PSUs") granted under the 2006

plan vest contingent upon the achievement of pre-determined financial metrics. The performance period for performance-based RSUs granted in fiscal year 2015 is three years. Market-based options grantedto employees under the 2006 Plan vest upon meeting certain share price performance criteria. Market-based RSUs granted under the 2006 Plan vest at the end of the three-year performance period upon meeting certain share pricepredetermined financial metrics over three years, with the number of shares to be received upon vesting determined based on weighted average constant currency revenue growth rate and the Company's total shareholder return ("TSR") relative to the performance criteria measured against market conditions. of companies in the Russell 3000 Index over the same three years period.
The performance period is fourfollowing table summarizes share-based compensation expense and total income tax benefit recognized for fiscal years 2023, 2022 and 2021 (in thousands):
 Years Ended March 31,
 202320222021
Cost of goods sold$5,635 $6,695 $6,438 
Marketing and selling34,707 37,796 36,788 
Research and development15,292 18,356 14,179 
General and administrative15,148 30,632 28,614 
Total share-based compensation expense70,782 93,479 86,019 
Income tax benefit(9,750)(26,987)(19,472)
Total share-based compensation expense, net of income tax benefit$61,032 $66,492 $66,547 
Share-based compensation costs capitalized as part of inventory were $5.6 million, $5.2 million, and $4.3 million for market-based options granted inthe fiscal year 2013. The performance period is three years for market-based RSU granted in fiscal years 2016, 2015ended March 31, 2023, 2022 and 2014. An aggregate of 24.8 million shares was reserved for issuance under the 2006 Plan. 2021, respectively.
As of March 31, 2016, a2023, there was $125.2 million of total of 7.8 million shares were available for issuance under this plan.
Under the 2012 Plan, stock options and RSUs mayfuture stock-based compensation cost to be granted to eligible employees to serve as inducement material to enter into employment with the Company. Awards under the 2012 Plan may be conditioned on continued employment, the passage of time or the satisfaction of market stock performance criteria, based on individual written employment offer letter. The 2012 Plan has an expiration date of March 28, 2022. Premium-priced stock options granted under the 2012 Plan vest in full if and only when Logitech's average closing share price,recognized over a consecutive ninety-day tradingweighted-average period meets or exceeds the exercise price of each of the three tranches of the grant. An aggregate of 1.8 million shares was reserved for issuance under the 2012 Plan. As of March 31, 2016, no shares were available for issuance under this plan.2.4 years.
The estimates of share-based compensation expense require a number of complex and subjective assumptions including stock price volatility, employee exercise patterns, future forfeitures, probability of achievement of the set performance condition, dividend yield, related tax effects and the selection of an appropriate fair value model.
The grant date fair value of the awardsstock options and ESPP using the Black-Scholes-Merton option-pricing valuation model and the grant date fair value of the PSUs using the Monte-Carlo simulation method are determined applyingwith the following assumptions and values:
Logitech International S.A. | Fiscal 2023 Form 10-K | 77

Table of Contents
 Employee Stock Purchase Plans Years Ended March 31,
  2016 2015 2014
Dividend yield 3.47% 1.97% 0.43%
Risk-free interest rate 0.29% 0.14% 0.07%
Expected volatility 26% 30% 36%
Expected life (years) 0.5
 0.6
 0.5
Weighted average fair value $3.29
 $3.18
 $2.46
Stock Options(1)
 Employee Stock Purchase Plans
Year Ended March 31,Years Ended March 31,
 2022202320222021
Expected dividend rate1.18 %1.78 %1.03 %1.04 %
Risk-free interest rate1.99 %3.86 %0.27 %0.10 %
Expected volatility34 %46 %35 %47 %
Expected term (years)6.20.50.50.5
Weighted average grant date fair value per share$25.88$16.32$23.55$24.67
(1) No stock options were granted for fiscal years 2023 and 2021.
Market-based RSUs Years Ended March 31,
  2016 2015 2014
Dividend yield 3.78% 1.86% 0.75%
Risk-free interest rate 0.84% 0.83% 1.09%
Expected volatility 38% 46% 46%
Expected life (years) 3.0
 3.0
 2.9
PSUsYears Ended March 31,
 202320222021
Expected dividend rate1.46 %0.78 %1.24 %
Risk-free interest rate2.78 %0.31 %0.21 %
Expected volatility39 %37 %31 %
Expected term (years)3.03.03.0
The expected dividend yieldrate assumption is based on the Company's history and future expectations of dividend payouts. The unvested RSUsPSUs or unexercised options are not eligible for these dividends. The expected lifeterm is based on historical settlement rates, which the Company believes are most representative of future exercise and post-vesting termination behaviors, or the purchase offerings periods expected to remain outstanding for employee stock purchase plan or the derivedperformance period based onfor PSUs. The expected term for stock options represents the estimated period of time until option exercise. Since the Company has limited historical stock option exercise experience, the Company used the simplified method in estimating the expected term, which is calculated as the average of the sum of the vesting term and the original contractual term of the stock performance for market-based awards.options. Expected volatility is based on historical volatility using the Company's daily closing prices, or including the volatility of components of the NASDAQ 100 indexRussell 3000 Index for market-based RSUs,PSUs, over the expected life. term. The Company considers the historical price volatility of its shares as most representative of future volatility. The risk-free interest rate assumptions are based upon the implied yield of U.S. Treasury zero-coupon issues appropriate for the expected lifeterm of the Company's share-based awards.
The Company estimates awards forfeitures atFor PSUs, the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option and RSU forfeitures and records share-based compensation expense only for those awards that are expected to vest.

The Company estimates the probability and timing of the achievement of the set performance condition at the time of the grant based on the historical financial performance and the financial forecast in the remaining performance contingency period and reassesses the probability in subsequent periods when actual results or new information become available.
A summary of the Company's stock option activities under all stock plans for fiscal years 2016, 20152023, 2022 and 20142021 is as follows (including discontinued operations for all the periods presented):follows:
 Number of SharesWeighted-Average Exercise PriceWeighted-Average Remaining Contractual TermAggregate Intrinsic Value
(In thousands)(Years)(In thousands)
Outstanding, March 31, 20201,969 
Exercised(1,347)$68,596 
Outstanding, March 31, 2021622 
Granted842 
Exercised(71)$5,573 
Outstanding, March 31, 20221,393 $62 8.3$21,830 
Exercised(155)$21 $6,482 
 Forfeited(118)$80 
Outstanding, March 31, 20231,120 $66 7.6$7,491 
Vested and exercisable, March 31, 2023396 $39 5.2$7,491 
Logitech International S.A. | Fiscal 2023 Form 10-K | 78
  Number of Shares Weighted-Average Exercise Price 
Weighted-Average Remaining Contractual Term

 Aggregate Intrinsic Value
  (In thousands)   (Years) (In thousands)
Outstanding, March 31, 2013 13,684
 

    
Granted —
 

    
Exercised (551) 

   $2,045
Cancelled or expired (3,317) 

    
Outstanding, March 31, 2014 9,816
 

    
Granted —
 

    
Exercised (390) 

   $1,505
Cancelled or expired (1,550) 

    
Outstanding, March 31, 2015 7,876
 $18
 
 

Granted —
 $—
 
 

Exercised (746) $10
 
 $4,026
Cancelled or expired (1,796) $20
 
 

Outstanding, March 31, 2016 5,334
 $18
 4.0 $12,436
Vested and expected to vest, March 31, 2016 4,004
 $19
 3.2 $8,119
Vested and exercisable, March 31, 2016 3,879
 $20
 3.1 $7,134

The options outstanding asTable of March 31, 2016 above includes 1.3 million shares of unvested market-based awards. The number of shares expected to vest for market-based awards is calculated assuming March 31, 2016 were the end of the performance contingency period.Contents
As of March 31, 2016, the exercise price of outstanding options ranged from $1 to $40 per option.
The tax benefit realized for the tax deduction from options exercised during the fiscal years 2016, 20152023, 2022 and 20142021 was $0.1 million, $1.2 million $0.5and $0.6 million, and $0.5 million, respectively.

A summary of the Company's time-based, market-based,RSU and performance-based RSUPSU activities for fiscal years 2016, 20152023, 2022 and 20142021 is as follows (including discontinued operations for all the periods presented):follows:
 Number of SharesWeighted-Average Grant Date Fair ValueAggregate
Fair Value
(In thousands)(In thousands)
Outstanding, March 31, 20203,951 $36 
Granted—RSUs1,046 $60 
Granted—PSUs303 $67 
Vested(1,444)$168,816 
Forfeited(213)
Outstanding, March 31, 20213,643 $45 
Granted—RSUs868 $103 
Granted—PSUs203 $124 
Vested(1,463)$133,977 
Forfeited(205)
Outstanding, March 31, 20223,046 $68 
Granted—RSUs1,584 $53 
Granted—PSUs407 $69 
Vested(1,143)$48 $85,152 
Forfeited(438)$68 
Outstanding, March 31, 20233,456 $66 
  Number of Shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Vesting Period 
Aggregate
Fair Value
  (In thousands)   (Years) (In thousands)
Outstanding, March 31, 2013 4,642
 $10
    
Granted—time-based 3,104
 $11
    
Granted—market-based 1,060
 $8
    
Vested (1,560) $9
   $17,810
Cancelled or expired (1,158) $15
    
Outstanding, March 31, 2014 6,088
 $10
    
Granted—time-based 1,332
 $13
    
Granted—market-based 523
 $13
    
Granted - performance-based 55
 $12
    
Vested (1,949) $10
   $27,844
Cancelled or expired (1,110) $11
    
Outstanding, March 31, 2015 4,939
 $11
    
Granted—time-based 2,247
 $13
    
Granted—market-based 356
 $14
    
Granted - performance-based 356
 $13
    
Vested (1,557) $10
   $22,823
Cancelled or expired (820) $12
    
Outstanding, March 31, 2016 5,521
 $12
 1.5 $87,837
Expected to vest, March 31, 2016 4,687
 $12
 1.2 $74,352
The RSUshares outstanding as of March 31, 20162023 above includes 1.7include 0.8 million shares of market-based and performance-based shares. The number of shares expected to vest for these awards is calculated assuming March 31, 2016 were the end of the performance contingency period. The number of shares of common stock for market-based awards to be received at vesting will range from zero percent to 150 percent of the target number of stock units based on the Company's total stockholder return (“TSR”) relative to the performance of companies in the NASDAQ-100 Index for each measurement period, generally over a three year period.PSUs. The Company presents shares grantedthe number of PSUs at 100 percent of targetthe performance target; however, the aggregate fair value of shares vested during the year is based on the actual number of stock units vested based on the achievement of the number of stock units that may potentially vest. financial metrics over the performance period.
The tax benefit realized for the tax deduction from RSUs and PSUs that vested during the fiscal years 2016, 20152023, 2022 and 20142021 was $5.1$11.1 million, $6.9$25.2 million and $4.7$16.3 million, respectively.
Defined Contribution
Note 5—Employee Benefit Plans
Certain of the Company's subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees. Contributions to these plans are discretionary for certain plans and are based on specified or statutory requirements for others. The charges to expense for these plans for fiscal years 2016, 2015 and 2014, were $6.8 million, $5.5 million and $6.3 million, respectively.
Defined Benefit Plans
Certain of the Company's subsidiaries sponsor defined benefit pension plans or non-retirement post-employment benefits covering substantially all of their employees. Benefits are provided based on employees' years of service and earnings, or in accordance with applicable employee benefit regulations. The Company's practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations.
The Company recognizes the overfunded or underfunded status of defined benefit pension plans and non-retirement post-employment benefit obligations as an asset or liability in its consolidated balance sheets and recognizes changes in the funded status of defined benefit pension plans in the year in which the changes occur

through accumulated other comprehensive income (loss), which is a component of shareholders' equity. Each plan's assets and benefit obligations are generally remeasured as of March 31 each year.
Except for the balance as
Logitech International S.A. | Fiscal 2023 Form 10-K | 79

Table of March 31, 2016, all the amounts in this "Defined Benefit Plans" section include activities from both continuing and discontinued operations for all the periods presented, and the amounts from discontinued operations are not material for all the periods presented.Contents
The net periodic benefit cost of the defined benefit pension plans and the non-retirement post-employment benefit obligations for fiscal years 2016, 20152023, 2022 and 20142021 was as follows (in thousands):
 Years Ended March 31,
 202320222021
Service costs$13,195 $14,693 $12,121 
Interest costs2,408 920 1,047 
Expected return on plan assets(3,754)(2,930)(2,535)
Amortization:
Net prior service credit recognized(458)(465)(467)
Net actuarial loss (gain) recognized(3,047)(2,158)2,144 
Curtailment gain(4,225)— — 
Settlement gain(339)— — 
Total net periodic benefit cost$3,780 $10,060 $12,310 
  Years Ended March 31,
  2016 2015 2014
Service costs $10,117
 $7,646
 $8,591
Interest costs 1,147
 1,970
 1,794
Expected return on plan assets (1,657) (2,084) (1,727)
Amortization:      
    Net transition obligation 4
 4
 4
Net prior service costs (credit) recognized (124) (45) 210
Net actuarial loss recognized 1,854
 301
 592
Settlement and curtailment —
 (13) 769
  $11,341
 $7,779
 $10,233
The components of net periodic benefit cost other than the service costs component are included in other income (expense), net in the consolidated statements of operations.
The changes in projected benefit obligations for fiscal years 20162023 and 20152022 were as follows (in thousands):
 Years Ended March 31, Years Ended March 31,
 2016 2015 20232022
Projected benefit obligations, beginning of the year $113,323
 $102,383
Projected benefit obligations, beginning of the year$207,551 $202,348 
Service costs 10,117
 7,646
Service costs13,195 14,693 
Interest costs 1,147
 1,970
Interest costs2,408 920 
Plan participant contributions 2,990
 2,914
Plan participant contributions6,870 6,092 
Actuarial (gains) losses (2,496) 16,768
Actuarial gainActuarial gain(22,965)(31,198)
Benefits paid (5,277) (5,307)Benefits paid(2,646)(3,904)
Plan amendment related to statutory change —
 (3,936)
Settlement and curtailment —
 (157)
Transfer of prior vested benefitsTransfer of prior vested benefits11,579 14,963 
SettlementSettlement(15,348)— 
CurtailmentCurtailment(3,923)— 
Administrative expense paid —
 (160)Administrative expense paid(147)(130)
Currency exchange rate changes 669
 (8,798)Currency exchange rate changes(1,238)3,767 
Projected benefit obligations, end of the year $120,473
 $113,323
Projected benefit obligations, end of the year$195,336 $207,551 
The accumulated benefit obligation for all defined benefit pension plans as of March 31, 20162023 and 20152022 was $99.5$170.3 million and $92.0$178.5 million, respectively.     

Actuarial gains related to the change in the benefit obligation for the Company's pension plans for fiscal years 2023 and 2022 were primarily due to an increase in discount rate.
Logitech International S.A. | Fiscal 2023 Form 10-K | 80

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The following table presents the changes in the fair value of defined benefit pension plan assets for fiscal years 20162023 and 20152022 (in thousands):
 Years Ended March 31, Years Ended March 31,
 2016 2015 20232022
Fair value of plan assets, beginning of the year $60,910
 $63,384
Fair value of plan assets, beginning of the year$156,118 $128,061 
Actual return on plan assets (1,160) 136
Actual return on plan assets(6,008)(2,156)
Employer contributions 7,171
 5,731
Employer contributions11,645 10,877 
Plan participant contributions 2,990
 2,914
Plan participant contributions6,870 6,092 
Benefits paid (5,277) (5,307)
Benefits paid
(2,646)(3,904)
Settlement and curtailment —
 (157)
Transfer of prior vested benefitsTransfer of prior vested benefits11,579 14,963 
SettlementSettlement(15,348)— 
Administrative expenses paid —
 (160)Administrative expenses paid(147)(130)
Currency exchange rate changes 645
 (5,631)Currency exchange rate changes536 2,315 
Fair value of plan assets, end of the year $65,279
 $60,910
Fair value of plan assets, end of the year$162,599 $156,118 
The Company's investment objectives are to ensure that the assets of its defined benefit plans are invested to provide an optimal rate of investment return on the total investment portfolio, consistent with the assumption of a reasonable risk level, and to ensure that pension funds are available to meet the plans' benefit obligations as they become due. The Company believes that a well-diversified investment portfolio will result in the highest attainable investment return with an acceptable level of overall risk. Investment strategies and allocation decisions are also governed by applicable governmental regulatory agencies. The Company's investment strategy with respect to its largest defined benefit plan, which is available only to Swiss employees, is to invest inper the following allocation ranges starting from January 2015: 20-55% forallocation: 33% in equities, 25-65% for28% in bonds, and 0-20% for28% in real estate, 4% in cash and cash equivalents.equivalents and the remaining in other investments. The Company also can invest in real estate funds, commodity funds, and hedge funds dependdepending upon economic conditions.
The following tables present the fair value of the defined benefit pension plan assets by major categories and by levels within the fair value hierarchy as of March 31, 20162023 and 20152022 (in thousands):
March 31,
 March 31, 20232022
 2016 2015 Level 1Level 2TotalLevel 1Level 2Total
 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash $9,268
 $47
 $—
 $9,315
 $7,958
 $46
 $—
 $8,004
Cash and cash equivalentsCash and cash equivalents$7,071 $— $7,071 $16,317 $— $16,317 
Equity securities 18,640
 —
 —
 18,640
 20,476
 —
 —
 20,476
Equity securities51,963 — 51,963 48,591 — 48,591 
Debt securities 21,781
 —
 —
 21,781
 20,357
 —
 —
 20,357
Debt securities43,493 — 43,493 38,513 — 38,513 
Swiss real estate funds 9,622
 —
 —
 9,622
 8,586
 —
 —
 8,586
Real estate fundsReal estate funds21,197 23,710 44,907 25,146 13,077 38,223 
Hedge funds —
 3,492
 —
 3,492
 —
 3,251
 —
 3,251
Hedge funds606 7,907 8,513 — 8,076 8,076 
Insurance contracts —
 94
 —
 94
 —
 114
 —
 114
Other 2,195
 140
 —
 2,335
 28
 94
 —
 122
Other6,248 404 6,652 6,034 364 6,398 
 $61,506
 $3,773
 $—
 $65,279
 $57,405
 $3,505
 $—
 $60,910
Total fair value of plan assets Total fair value of plan assets$130,578 $32,021 $162,599 $134,601 $21,517 $156,118 
The funded status of the plans was as follows (in thousands):
 Years Ended March 31,
 20232022
Fair value of plan assets$162,599 $156,118 
Less: projected benefit obligations195,336 207,551 
Underfunded status $(32,737)$(51,433)
Logitech International S.A. | Fiscal 2023 Form 10-K | 81
  Years Ended March 31,
  2016 2015
Fair value of plan assets $65,279
 $60,910
Less: Projected benefit obligations 120,473
 113,323
Under funded status  $(55,194) $(52,413)


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Amounts recognized on the balance sheetsheets for the plans were as follows (in thousands):
 March 31, March 31,
 2016 2015 20232022
Current liabilities $(1,285) $(1,232)Current liabilities$1,407 $1,677 
Non-current liabilities (53,909) (51,181)Non-current liabilities31,330 49,756 
Net liabilities $(55,194) $(52,413)
Total liabilities Total liabilities$32,737 $51,433 
Amounts recognized in accumulated other comprehensive lossincome (loss) related to defined benefit pension plans were as follows (in thousands):
 March 31,
 20232022
Net prior service credits$2,201 $2,883 
Net actuarial gain (loss)5,690 (4,304)
  Accumulated other comprehensive income (loss)7,891 (1,421)
Deferred taxes(3,366)(2,074)
  Accumulated other comprehensive income (loss), net of tax$4,525 $(3,495)
  March 31,
  2016 2015 2014
Net prior service costs (credits) $1,613
 $1,672
 $(2,149)
Net actuarial loss (27,612) (28,751) (12,319)
Net transition obligation (4) (8) (12)
Accumulated other comprehensive loss (26,003) (27,087) (14,480)
Deferred tax benefit (168) 123
 192
Accumulated other comprehensive loss, net of tax $(26,171) $(26,964) $(14,288)
The following table presents the amounts included in accumulated other comprehensive loss as of March 31, 2016, which are expected to be recognized as a component of net periodic benefit cost in fiscal year 2017 (in thousands):
  
Year Ending
March 31, 2017
Amortization of net transition obligation $4
Amortization of net prior service credits (128)
Amortization of net actuarial loss 1,650
  $1,526
The Company reassesses its benefit plan assumptions on a regular basis. The actuarial assumptions for the defined benefit plans for fiscal years 2016 and 2015 were as follows:
 Years Ended March 31,
 20232022
Benefit Obligations:
Discount rate1.00% - 7.25%1.00% - 6.75%
Estimated rate of compensation increase2.25% - 10.00%2.00% - 10.00%
Cash balance interest credit rate0.00% - 1.75%0.00% - 1.75%
Years Ended March 31,
 Years Ended March 31,202320222021
 2016 2015
Benefit Obligations: 
Discount rate 0.5%-8.00% 0.75%-7.75%
Estimated rate of compensation increase 2.50%-10.00% 2.50%-8.00%
Periodic Costs: 
Net Periodic Costs:Net Periodic Costs:
Discount rate 0.75%-7.75% 1.50%-9.25%Discount rate0.50% - 6.75%0.25% - 6.00%0.50% - 6.75%
Estimated rate of compensation increase 0.0%-8.00% 2.50%-8.00%Estimated rate of compensation increase2.00% - 10.00%2.00% - 10.00%2.25% - 10.00%
Expected average rate of return on plan assets 1.00%-2.75% 0.75%-3.50%Expected average rate of return on plan assets1.00% - 2.50%1.00% - 2.25%1.00% - 2.50%
Cash balance interest credit rateCash balance interest credit rate0.00% - 1.75%0.00% - 1.75%0.00% - 1.75%
The discount rate is estimated based on corporate bond yields or securities of similar quality in the respective country, with a duration approximating the period over which the benefit obligations are expected to be paid. The Company bases the compensation increase assumptions on historical experience and future expectations. The expected average rate of return for the Company's defined benefit pension plans represents the average rate of return expected to be earned on plan assets over the period that the benefit obligations are expected to be paid, based on government bond notes in the respective country, adjusted for corporate risk premiums as appropriate.

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The following table reflects the benefit payments that the Company expects the plans to pay in the periods noted (in thousands):
Years Ending March 31,  
2017 $4,751
2018 4,954
2019 5,307
2020 6,026
2021 5,241
2022-2026 29,520
  $55,799
Years Ending March 31,
2024$26,765 
202511,728 
202612,046 
202714,440 
202812,772 
Next five fiscal years66,302 
Total expected benefit payments by the plan$144,053 
The Company expects to contribute $4.9$9.4 million to its defined benefit pension plans during fiscal year 2017.2024.
Defined Contribution Plans
Certain of the Company's subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees. Contributions to these plans are discretionary for certain plans and are based on specified or statutory requirements for others. The charges to expense for these plans for fiscal years 2023, 2022 and 2021, were $14.4 million, $13.9 million and $10.6 million, respectively.
Deferred Compensation Plan
One of the Company's subsidiaries offers a deferred compensation plan that permits eligible employees to make 100% vested salary and incentive compensation deferrals within established limits. The Company does not make contributions to the plan.
The deferred compensation plan's assets consist of marketable securities and are included in other assets on the consolidated balance sheets. The marketable securities are classified as trading investments and were recorded at a fair value of $14.8$28.2 million and $17.2$28.4 million as of March 31, 20162023 and 2015,2022, respectively, based on quoted market prices.prices (see Note 9). The Company also had $14.8deferred compensation liability of $28.2 million and $17.2$28.4 million, deferred compensation liabilitywhich are included in other non-current liabilities on the consolidated balance sheets as of March 31, 20162023 and 2015,2022, respectively. Earnings, gains and losses on tradingdeferred compensation investments are included in other income (expense), net and corresponding changes in deferred compensation liability are included in operating expenses and cost of goods sold.sold in the consolidated statements of operations (see Note 6).
Note 6—Interest and Other Income (Expense), net
Interest income (expense), net comprises of the following (in thousands):
  Years Ended March 31,
  2016 2015 2014
Interest income $790
 $1,197
 $1,797
Interest expense —
 —
 (2,228)
Interest income (expense), net $790
 $1,197
 $(431)
Other income (expense), net comprises of the following (in thousands):
 Years Ended March 31,
 202320222021
Investment (loss) gain related to the deferred compensation plan$(1,961)$1,231 $5,916 
Currency exchange loss, net(7,337)(4,604)(2,688)
Loss on investments, net (1)
(14,073)(1,683)(5,910)
Non-service cost net pension income (expense) and other (2)
10,093 5,616 893 
Other income (expense), net$(13,278)$560 $(1,789)
(1) Includes realized gain (loss) on sales of investments, unrealized gain (loss) from the change in fair value of investments, gain (loss) on equity-method investments, and impairment of investments during the periods presented, as applicable, (see Note 9).
(2) Includes the components of net periodic benefit cost of defined benefit plans other than the service cost component (see Note 5).

Logitech International S.A. | Fiscal 2023 Form 10-K | 83
  Years Ended March 31,
  2016 2015 2014
Investment income (loss) related to deferred compensation plan $(364) $1,055
 $1,487
Impairment of investments —
 (2,298) (624)
Currency exchange gain (loss), net 2,110
 (1,175) (62)
Other (122) 120
 1,238
Other income (expense), net $1,624
 $(2,298) $2,039


Table of Contents
Note 7—Income Taxes
The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates. Further, a portion of the Company's income (loss) before taxes and the provision for (benefit from) income taxes is generated outside of Switzerland.
Income from continuing operations before income taxes for the fiscal years 2016, 20152023, 2022 and 20142021 is summarized as follows (in thousands):
 Years Ended March 31, Years Ended March 31,
 2016 2015 2014 202320222021
Swiss $80,572
 $119,460
 $62,544
Swiss$282,970 $579,258 $984,185 
Non-Swiss 50,900
 33,623
 44,760
Non-Swiss180,552 196,560 163,935 
Income before taxes $131,472
 $153,083
 $107,304
Income before taxes$463,522 $775,818 $1,148,120 
The provision for (benefit from) income taxes is summarized as follows (in thousands):
 Years Ended March 31,Years Ended March 31,
 2016 2015 2014202320222021
Current:      Current:
Swiss $1,668
 $1,152
 $814
Swiss$19,405 $59,659 $121,199 
Non-Swiss (2,582) 579
 6,219
Non-Swiss48,829 44,094 45,056 
Deferred:      Deferred:
SwissSwiss26,629 29,198 31,558 
Non-Swiss 4,024
 2,923
 (5,720)Non-Swiss4,085 (1,646)3,050 
Provision for income taxes $3,110
 $4,654
 $1,313
Provision for income taxes$98,947 $131,305 $200,863 
The difference between the provision for (benefit from) income taxes and the expected tax provision (tax benefit) at the statutory income tax rate of 8.5% is reconciled below (in thousands):
 Years Ended March 31,
 202320222021
Expected tax provision at statutory income tax rates$39,399 $65,945 $97,590 
Income taxes at different rates38,467 61,296 88,760 
Research and development tax credits(152)(5,957)(3,844)
Executive compensation749 4,683 4,821 
Stock-based compensation5,736 (9,141)(3,161)
Deferred tax effects from TRAF— — 1,944 
Valuation allowance908 887 (247)
Impairment1,881 — — 
Restructuring charges / (credits)(1,764)— (5)
Unrecognized tax benefits13,284 16,577 15,978 
Audit settlement— (3,655)— 
Other, net439 670 (973)
Provision for income taxes$98,947 $131,305 $200,863 
Logitech International S.A. | Fiscal 2023 Form 10-K | 84

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  Years Ended March 31,
  2016 2015 2014
Expected tax provision at statutory income tax rates $11,175
 $13,012
 $9,121
Income taxes at different rates (2,713) (4,299) (2,523)
Research and development tax credits (1,619) (1,120) (1,229)
Executive compensation 864
 1,557
 —
Stock-based compensation 1,446
 2,261
 1,608
Valuation allowance 947
 764
 182
Restructuring charges / (credits) 1,514
 (415) 1,174
Tax reserves (releases), net (8,761) (6,912) (6,209)
Audit settlement —
 (837) (400)
Other, net 257
 643
 (411)
Provision for income taxes $3,110
 $4,654
 $1,313
On December 18, 2015, the enactment of the Protecting Americans from Tax Hikes Act of 2015 in the United States extended the federal research and development tax credit permanently which had previously expired on December 31, 2014. The provision for income taxes for fiscal year ended March 31, 2016 reflected a $1.5 million tax benefit as a result of the extension of the tax credit.

Deferred income tax assets and liabilities consist of the following (in thousands):
 March 31,
 20232022
Deferred tax assets:  
Tax attributes carryforward$36,700 $34,736 
Accruals85,786 88,060 
Depreciation and amortization707 585 
Tax step-up of goodwill from TRAF100,514 118,000 
Share-based compensation11,093 13,152 
Gross deferred tax assets234,800 254,533 
Valuation allowance(30,766)(29,858)
Deferred tax assets after valuation allowance204,034 224,675 
Deferred tax liabilities:  
Acquired intangible assets and other(34,848)(33,008)
Deferred tax liabilities(34,848)(33,008)
Deferred tax assets, net$169,186 $191,667 
  March 31,
  2016 2015
Deferred tax assets:  
  
Net operating loss carryforwards $7,136
 $8,372
Tax credit carryforwards 2,981
 2,739
Accruals 36,365
 44,363
Depreciation and amortization 4,059
 4,396
Share-based compensation 12,890
 14,183
Gross deferred tax assets 63,431
 74,053
Valuation allowance (5,338) (5,590)
Gross deferred tax assets after valuation allowance 58,093
 68,463
Deferred tax liabilities:  
  
Acquired intangible assets and other (3,550) (3,299)
Gross deferred tax liabilities (3,550) (3,299)
Deferred tax assets, net $54,543
 $65,164
Included in tax attributes carryforward above are net operating loss and tax credit carryforwards.
Management regularly assesses the ability to realize deferred tax assets recorded in the Company's entities based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
The Company had a valuation allowance against deferred tax assets of $30.8 million at March 31, 2023, compared to $29.9 millionat March 31, 2022. The Company had a valuation allowance of $5.3 million at March 31, 2016, decreased from $5.6 million at March 31, 2015 primarily due to $1.3 million increase in valuation allowance for deferred tax assets in the state of California of the United States which was offset by $1.5 million decrease in valuation allowance due to the expiration of capital loss carryforwards in the United States. The Company had a valuation allowance of $4.9$30.8 million as of March 31, 20162023 against deferred tax assets in the state of California, an increase from $29.7 million as of March 31, 2022 from activities during the United States. The remaining valuation allowance primarily represents $0.4 million for various tax credit carryforwards.year. The Company determined that it is more likely than not that the Company would not generate sufficient taxable income in the future to utilize such deferred tax assets.
Deferred tax assets relating to tax benefits of employee stock grants have been reduced to reflect settlement activity in fiscal years 2016 and 2015. Settlement activity of grants in fiscal years 2016 and 2015 resulted in a "shortfall" in which tax deductions were less than previously recorded share-based compensation expense. The Company recorded a shortfall to equity of $2.3 million and $1.8 million, respectively, in fiscal years 2016 and 2015.
As of March 31, 2016,2023, the Company had foreignnet operating loss carryforwards in Switzerland for income tax purposes of $17.7 million which will begin to expire in fiscal year 2028. The Company had net operating loss and tax credit carryforwards in the United States for income tax purposes of $203.5$60.2 million and $43.8$74.6 million, respectively, of which $146.0 million of the net operating loss carryforwards and $26.6 million of the tax credit carryforwards, if realized, will be credited to equity since they have not met the applicable realization criteria.respectively. Unused net operating loss carryforwards will expire at various dates beginning in fiscal years 2017 to 2036.year 2030. Certain net operating loss carryforwards in the United States relate to acquisitions and, as a result, are limited in the amount that can be utilized in any one year. The tax credit carryforwards will begin to expire in fiscal year 2019.2030.
Swiss income taxes and non-Swiss withholding taxes associated with the repatriation of earnings or for other temporary differences related to investments in non-Swiss subsidiaries have not been provided for, as the Company intends to reinvest the earnings of such subsidiaries indefinitely or the Company has concluded that no additional tax liability would arise on the distribution of such earnings.indefinitely. If these earnings were distributed to Switzerland in the form of dividends or otherwise, or if the shares of the relevant non-Swiss subsidiaries were sold or otherwise transferred, the Company may be subject to additional Swiss income taxes and non-Swiss withholding taxes. As of March 31, 2016,2023, the cumulative amount of unremitted earnings of non-Swiss subsidiaries for which no income taxes have been provided is approximately $157.5$323.8 million. The amount of unrecognized deferred income tax liability related to these earnings is estimated to be approximately $5.2$9.5 million.

The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.
As of March 31, 20162023 and March 31, 2015,2022, the total amount of unrecognized tax benefits due to uncertain tax positions was $69.9$186.8 million and $79.0$176.0 million, respectively, all of which would affect the effective income tax rate if recognized.
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As of March 31, 2016,2023 and 2022, the Company had $59.7$106.4 million and $83.4 million, respectively, in non-current income taxes payable and $0.1 million in current income taxes payable, including interest and penalties, related to the Company's income tax liability for uncertain tax positions. As of March 31, 2015, the Company had $72.1 million in non-current income taxes payable and $0.1 million in current income taxes payable.
The aggregate changes in gross unrecognized tax benefits in fiscal years 2016, 20152023, 2022 and 20142021 were as follows (in thousands):.
March 31, 2020$143,497 
Lapse of statute of limitations(4,024)
Increases in balances related to tax positions taken during the year23,780 
March 31, 2021$163,253 
Lapse of statute of limitations(4,232)
Settlements with taxing authorities(2,015)
Increases in balances related to tax positions taken during the year22,366 
March 31, 2022$179,372 
Lapse of statute of limitations(3,586)
Increases in balances related to tax positions taken during the year15,214 
March 31, 2023$191,000 
March 31, 2013 $95,698
Lapse of statute of limitations (12,514)
Settlements with tax authorities (100)
Decreases in balances related to tax positions taken during prior years (778)
Increases in balances related to tax positions taken during the year 8,740
March 31, 2014 $91,046
Lapse of statute of limitations (14,071)
Settlements with tax authorities (2,160)
Decreases in balances related to tax positions taken during prior years (3,544)
Increases in balances related to tax positions taken during the year 7,752
March 31, 2015 $79,023
Lapse of statute of limitations (15,518)
Settlements with tax authorities —
Decreases in balances related to tax positions taken during prior years (1,502)
Increases in balances related to tax positions taken during the year 7,876
March 31, 2016 $69,879
Fiscal year 2020 includes gross unrecognized tax benefits recorded as a result of the enactment of the Tax Reform and AHV Financing ("TRAF") in Switzerland.
The Company recognizes interest and penalties related to unrecognized tax positions in income tax expense. The Company recognized $0.3$2.7 million, $0.8$1.5 million, and $1.1 million in interest and penalties in income tax expense during fiscal years 2016, 20152023, 2022 and 2014,2021, respectively. As of March 31, 2016, 20152023 and 2014,2022, the Company had $6.1 million, and $3.6 million, $4.9 million and $5.6 millionrespectively, of accrued interest and penalties related to uncertain tax positions, respectively.positions.
The Company files Swiss and foreign tax returns. The Company received final tax assessments in Switzerland through fiscal year 2013.2019. For other material foreign jurisdictions such as the United States and China, the Company is generally not subject to tax examinations for years prior to fiscal year 2012.2020 and calendar year 2020, respectively. In the United States, the federal and state tax agencies have the authority to examine periods prior to fiscal year 2020, to the extent allowed by law, where tax attributes were generated, carried forward, and being utilized in subsequent years. The Company is under examination and has received assessment notices in foreign tax jurisdictions. If the examinations are resolved unfavorably, there is a possibility they may have a material negative impact on its results of operations. In fiscal year 2022, uncertain tax positions decreased by $4.2 million from an effective settlement of an income tax audit in a foreign jurisdiction.
Although the Company has adequately provided for uncertain tax positions, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, new tax audits and changes in the U.S. Dollar as compared to other currencies. Excluding these factors, uncertain tax positions may decrease by as much as $15.0$5.0 million primarily from the lapse of the statutes of limitations in various jurisdictions during the next 12 months.

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Note 8—Balance Sheet Components
The following table presents the components of certain balance sheet asset amounts as of March 31, 20162023 and 20152022 (in thousands):
 March 31,
 20232022
Accounts receivable, net: 
Accounts receivable$851,576 $964,766 
Allowance for doubtful accounts(86)(2,212)
Allowance for sales returns(10,146)(12,321)
Allowance for cooperative marketing arrangements(40,495)(56,372)
Allowance for customer incentive programs(71,645)(97,460)
Allowance for pricing programs(98,822)(120,797)
$630,382 $675,604 
Inventories:  
Raw materials$171,790 $226,155 
Finished goods511,103 706,969 
$682,893 $933,124 
Other current assets:  
VAT receivables$60,343 $58,850 
Prepaid expenses and other assets82,533 76,628 
$142,876 $135,478 
Property, plant and equipment, net:  
Plant, buildings and improvements$69,360 $68,477 
Equipment and tooling309,151 268,164 
Computer equipment31,535 31,562 
Software79,118 72,391 
489,164 440,594 
Less: accumulated depreciation and amortization(396,855)(349,606)
92,309 90,988 
Construction-in-process26,399 15,915 
Land2,795 2,904 
$121,503 $109,807 
Other assets:  
Deferred tax assets$171,989 $193,629 
Right-of-use assets67,330 40,661 
Investments in privately held companies33,323 43,068 
Investments for deferred compensation plan28,213 28,431 
Other assets15,438 14,933 
$316,293 $320,722 



Logitech International S.A. | Fiscal 2023 Form 10-K | 87
  March 31,
  2016 2015
Accounts receivable:    
Accounts receivable $332,553
 $328,373
Allowance for doubtful accounts (667) (707)
Allowance for sales returns (18,526) (17,236)
Allowance for cooperative marketing arrangements (*) (28,157) (24,919)
Allowance for customer incentive programs (*) (60,872) (47,364)
Allowance for pricing programs (*) (81,553) (70,951)
  $142,778
 $167,196
Inventories:  
  
Raw materials $48,489
 $36,044
Finished goods 180,297
 219,936
  $228,786
 $255,980
Other current assets:  
  
Income tax and value-added tax receivables $22,572
 $19,318
Deferred tax assets (**) —
 27,790
Prepaid expenses and other assets 12,916
 16,254
  $35,488
 $63,362
Property, plant and equipment, net:  
  
Plant, buildings and improvements $62,150
 $60,205
Equipment 166,371
 132,907
Computer equipment 36,018
 32,178
Software 97,201
 76,184
  361,740
 301,474
Less accumulated depreciation and amortization (278,352) (246,084)
  83,388
 55,390
Construction-in-process 6,771
 28,341
Land 2,701
 2,747
  $92,860
 $86,478
Other assets:  
  
Deferred tax assets (**) $56,208
 $39,310
Trading investments for deferred compensation plan 14,836
 17,237
Investment in privately held companies 9,247
 768
Other assets 6,525
 5,018
  $86,816
 $62,333


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The following table presents the components of certain balance sheet liability amounts as of March 31, 20162023 and 20152022 (in thousands):
 March 31,
 20232022
Accrued and other current liabilities:  
Accrued customer marketing, pricing and incentive programs$206,546 $232,393 
Accrued personnel expenses103,592 165,090 
Accrued sales return liability49,462 40,507 
Accrued loss for inventory purchase commitments46,608 46,361 
VAT payable33,328 39,602 
Warranty liabilities28,861 32,987 
Income taxes payable18,788 35,355 
Operating lease liabilities12,655 13,690 
Contingent consideration6,629 8,042 
Other current liabilities136,670 170,821 
$643,139 $784,848 
Other non-current liabilities:  
Operating lease liabilities$58,361 $28,207 
Employee benefit plan obligations32,421 50,741 
Obligation for deferred compensation plan28,213 28,431 
Warranty liabilities12,025 13,232 
Deferred tax liabilities2,803 1,962 
Contingent consideration— 4,217 
Other non-current liabilities12,872 5,343 
$146,695 $132,133 
  March 31,
  2016 2015
Accrued and other current liabilities:  
  
Accrued personnel expenses $46,025
 $46,022
Indirect customer incentive programs (*) 28,721
 19,730
Warranty accrual 11,880
 12,630
Employee benefit plan obligation 1,285
 1,219
Income taxes payable 1,553
 5,759
Other liabilities 84,300
 77,984
  $173,764
 $163,344
Non-current liabilities:  
  
Warranty accrual $8,500
 $9,080
Obligation for deferred compensation plan 14,836
 17,237
Employee benefit plan obligation 53,909
 51,081
Deferred tax liability (**) 1,665
 1,936
Other liabilities 10,625
 11,861
  $89,535
 $91,195

(*)The increase in the allowances for cooperative marketing arrangements, customer incentive programs, pricing programs, and accrued liabilities for indirect customer incentive programs is primarily due to increases in retail sales, timing of claims processed, and increases in the marketing activities, partially offset by price increases.

(**) Includes reclassifications of deferred tax assets and liabilities related to ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes".


Note 9—Fair Value Measurements
Fair Value Measurements
The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:
•Level 1—Quoted prices in active markets for identical assets or liabilities.
•Level 2—Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
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The following table presents the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company's defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands):
 March 31, 2023March 31, 2022
 Level 1Level 2Level 3Level 1Level 2Level 3
Assets:    
Cash equivalents$661,884 $— $— $762,055 $— $— 
Investments for deferred compensation plan included in other assets:    
Cash$41 $— $— $108 $— $— 
Common stock988 — — 2,329 — — 
Money market funds9,606 — — 6,765 — — 
Mutual funds17,578 — — 19,229 — — 
Total of investments for deferred compensation plan$28,213 $— $— $28,431 $— $— 
Currency derivative assets included in other current assets$— $107 $— $— $1,517 $— 
Liabilities:
Contingent consideration included in accrued and other current liabilities$— $— $6,629 $— $— $8,042 
Contingent consideration included in other non-current liabilities$— $— $— $— $— $3,971 
Currency derivative liabilities included in accrued and other current liabilities$— $2,187 $— $— $165 $— 
Contingent Consideration for Business Acquisitions
The following table summarizes the change in the Company's contingent consideration balance during fiscal year 2023 and 2022 (in thousands):
Year Ended March 31,
20232022
Beginning of the period$12,259 $6,967 
Fair value of contingent consideration upon acquisition2,1519,973 
Change in fair value of contingent consideration— (3,509)
Settlements of contingent consideration(5,954)(1,172)
Effect of foreign currency exchange rate changes$(1,827)— 
End of the period$6,629 $12,259 
On May 19, 2021, the Company made a technology acquisition for a total cash consideration of $25.6 million, which included contingent consideration of $10.0 million payable in cash upon the achievement of three technical development milestones to be completed as of December 31, 2021, June 30, 2022, and June 30, 2023. The fair value of the contingent consideration was $10.0 million at the acquisition date, which was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. During fiscal year 2022, the Company paid $0.9 million for the contingent consideration related to the first technical development milestone. During fiscal year 2023, the Company paid $4.0 million for the contingent consideration related to the second technical development milestone. The Company expects to pay the contingent consideration for the third technical development milestone within the next twelve months.
On February 17, 2021, the Company acquired all equity interests of Mevo Inc. ("Mevo") for a total cash consideration of $33.2 million, plus additional contingent consideration of up to $17.0 million payable in cash only upon the achievement of certain net revenues for the period from December 26, 2020 to December 31, 2021. The fair value of the contingent consideration as of the acquisition date was $3.4 million, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met, times the
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  March 31, 2016 March 31, 2015
  Level 1 Level 2 Level 1 Level 2
Cash equivalents:  
    
  
Cash equivalents $10,000
 $—
 $264,647
 $—
  $10,000
 $—
 $264,647
 $—
Trading investments for deferred compensation plan:  
    
  
Money market funds $3,467
 $—
 $2,936
 $—
Mutual funds 11,369
 —
 14,301
 —
  $14,836
 $—
 $17,237
 $—
Foreign exchange derivative assets $—
 $10
 $—
 $2,080
Foreign exchange derivative liabilities $—
 $1,132
 $—
 $75
value of the earn-out payment, and discounted at the risk-free rate. The valuation included significant assumptions and unobservable inputs such as the projected sales of Mevo over the earn-out period, risk-free rate, and the net sales volatility. Projected sales were based on the Company's internal projections, including analysis of the target market and historical sales of Mevo products. As of March 31, 2021 the fair value of the contingent consideration remained as $3.4 million. As of December 31, 2021, the fair value of the contingent consideration was released from other current liabilities as the net sales milestone was not achieved upon completion of the earn-out period.
InvestmentOn January 4, 2021, the Company made a technology acquisition for a total cash consideration of $11.0 million, which included contingent consideration of $3.0 million payable in cash upon the achievement of two technical development milestones to be completed as of December 31, 2021 and March 31, 2022. The fair value of the contingent consideration was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. During fiscal year 2023, the Company paid $2.0 million for the contingent consideration related to the first technical development milestone. The Company expects to pay the remaining $1.0 million for the second technical development milestone within the next twelve months.
In connection with the acquisition of Streamlabs on October 31, 2019, the Company agreed to pay a total earn-out payment of $29.0 million, payable in stock, only upon the achievement of certain net revenues for the period from January 1, 2020 to June 30, 2020. During fiscal year 2021 and 2022, the Company issued 390,397 and 4,010 shares, respectively, out of treasury stock to former security holders of Streamlabs, in satisfaction of payment of the contingent consideration that was earned during the earn-out period. The issuances of such shares were deemed to be exempt from registration under the Securities Act of 1933 (the "Securities Act"), in reliance on Regulation D of the Securities Act as transactions by an issuer not involving a public offering.
Although the estimate of contingent consideration is based on management’s best knowledge of current events, the estimate could change significantly from period to period. Actual results that differ from the assumptions used and any changes to the significant assumptions and unobservable inputs used could have an impact on future results of operations.
Investments for Deferred Compensation Plan
The marketable securities for the Company's deferred compensation plan are recorded at a fair value of $14.8$28.2 million and $17.2$28.4 million as of March 31, 20162023 and 2015,2022, respectively, based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy. Unrealized trading gains (losses) related to tradingmarketable securities for the fiscal years 2016, 20152023, 2022 and 20142021 are included in other income (expense), net in the consolidated statements of operations (see Note 6).
Equity Method Investments

The Company has certain non-marketable investments included in other assets that are accounted for as equity method investments, with a carrying value of $20.5 million and $40.2 million as of March 31, 2023 and 2022, respectively. Gains (losses) related to equity method investments for fiscal years 2023, 2022 and 2021 were not significantmaterial and are included in other income (expense), net.net in the Company's consolidated statements of operations (see Note 6).

During fiscal year 2023, the Company recorded an impairment charge, before tax, of $21.4 million for one of its equity method investments as it was determined that the carrying value of the investment was not recoverable. The impairment charge is included in other income (expense), net in the Company's consolidated statement of operations for fiscal year 2023. There was no impairment of equity method investments during fiscal years 2022 and 2021.
Assets Measured at Fair Value on a Nonrecurring Basis

Financial Assets. The Company’s non-marketable cost methodCompany has certain equity investments and non-financial assets, such as intangible assets and property, plant and equipment, are recorded atwithout readily determinable fair value only upon initial recognition or if an impairment is recognized. A summary of the valuation methodologies for assets and liabilities measured on a nonrecurring basis is as follows:

Non-marketable cost method investments. These investments are classified as Level 3values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. There were no significant impairments duringThe carrying value is also adjusted for observable price changes with the years ended March 31, 2016same or 2015.

Included in non-marketable investments primarily issimilar security from the Company’s investment in Series A Preferred Stock of Lifesize recorded at the estimated fair value of $5.6 million on the date of Lifesize divestiture. Refer to Note 3

"Discontinued Operations" to Consolidated Financial Statements for the valuation approach and significant inputs and assumptions.
same issuer. The aggregate recorded amount of cost methodthese equity investments without readily determinable fair value included in other assets atwas $12.6 million and $2.9 million as of March 31, 20162023 and March 31, 20152022, respectively. During fiscal year 2023, the Company recorded an unrealized gain, before tax, of $6.9 million for its investment in a private company as a result of observable price changes for similar securities issued by this
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company (level 2 fair value measurement). There was $7.4 millionno impairment of these investments during fiscal year 2022 and $0.3 million, respectively.the impairment charges related to these investments were not material during fiscal years 2023 and 2021.

Non-Financial Assets. Assets. Goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis. However, if the Company is required to evaluate these non-financial assets for impairment, whether due to certain triggering events occur (or tested at least annually for goodwill) such thator because of the required annual impairment test, and a non-financial instrument is required to be evaluated for impairment and anresulting impairment is recorded to reduce the non-financial instrument's carrying value to the fair value, as a result of such triggering events, the non-financial assets and liabilities are measured at fair value for the periodduring such triggering events occur.period. See Note 2 herein, for additional information about how the Company tests various asset classes for impairment. There was no impairment of non-financial assets during the fiscal years of 2023 and 2021. During fiscal year 2022, the Company recorded impairment charges of $7.0 million for the Jaybird-related intangible assets (see Note 11).
Note 10—Derivative Financial Instruments
 The following table presents the fair values of the Company's derivative instruments as of March 31, 2016 and 2015 (in thousands):
  Derivatives
  Asset Liability
  March 31, March 31,
  2016 2015 2016 2015
Designated as hedging instruments:  
  
  
  
Cash flow hedges $10
 $2,080
 $1,038
 $—
Not designated as hedging instruments:  
  
  
  
Foreign exchange contracts —
 —
 94
 75
  $10
 $2,080
 $1,132
 $75
Under certain agreements with the respective counterparties to the Company's derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets orand accrued and other current liabilities on the Consolidated Balance Sheetsconsolidated balance sheets as of March 31, 20162023 and 2015.
The following table presents2022. See Note 9 for the amountsfair values of gains and losses on the Company'sCompany’s derivative instruments for fiscal years 2016, 2015as of March 31, 2023 and 2014 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (loss) (in thousands):2022.
 Amount of
Gain (Loss) Deferred as
a Component of
Accumulated Other
Comprehensive Loss After Reclassification to Costs of Goods Sold		 Amount of Loss (Gain)
Reclassified from
Accumulated Other
Comprehensive Loss
to Costs of Goods Sold		 Amount of
Gain (Loss)
Immediately Recognized
in Other Income
(Expense), Net
 2016 2015 2014 2016 2015 2014 2016 2015 2014
Designated as hedging instruments:   
  
    
  
    
  
Cash flow hedges$(5,727) $4,466
 $(1,025) $(3,296) $(4,505) $2,472
 $292
 $20
 $(126)
Not designated as hedging instruments: 
  
  
  
  
  
  
  
  
Foreign exchange contracts—
 —
 —
 —
 —
 —
 (781) 2,479
 824
 $(5,727) $4,466
 $(1,025) $(3,296) $(4,505) $2,472
 $(489) $2,499
 $698
Cash Flow Hedges: Hedges
The Company enters into foreign exchange forwardcash flow hedge contracts to hedgeprotect against exchange rate exposure to changes in currency exchange rates related to its subsidiaries'of forecasted inventory purchases. The Company has one entity with a Euro functional currency that purchases inventory in U.S. Dollars. The primary risk managed by using

derivative instruments is the currency exchange rate risk. The Company has designated these derivatives as cash flow hedges. These hedging contracts mature within approximately four months, and are denominated in the same currency as the underlying transactions.months. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. The Company assesses the effectiveness of the hedges by comparing changes in the spot rate of the currency underlying the forward contract with changes in the spot rate of the currency in which the forecasted transaction will be consummated. If the underlying transaction being hedged fails to occur or if a portion of the hedge does not generate offsetting changes in the currency exposure of forecasted inventory purchases, the Company immediately recognizes the gain or loss on the associated financial instrument in other income (expense), net. Such gains and losses were not material during fiscal years 2016, 2015 and 2014. Cash flows from such hedges are classified as operating activities in the Consolidated Statementsconsolidated statements of Cash Flows. Ascash flows. Hedging relationships are discontinued when hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when the Company removes hedge designation for the contract. Gains and losses in the fair value of March 31, 2016, and 2015, the effective portion of the discontinued hedges continue to be reported in accumulated other comprehensive loss until the hedged inventory purchases are sold, unless it is probable that the forecasted inventory purchases will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter.
The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted inventory purchasesinventory purchases were $39.8$72.6 million and $43.5$125.4 million as of March 31, 2023 and 2022, respectively. The Company estimates that $1.8had $3.9 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of March 31, 20162023, which will be reclassified into earnings within the next 12twelve months.
The following table presents the amounts of gain (loss) on the Company's derivative instruments designated as hedging instruments for fiscal years 2023, 2022 and 2021 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (in thousands):
 Amount of
Gain (Loss) Deferred as
a Component of
Accumulated Other
Comprehensive Loss		Amount of Loss (Gain)
Reclassified from
Accumulated Other
Comprehensive Loss
to Costs of Goods Sold
 202320222021202320222021
Cash flow hedges$2,625$6,308 $(4,071)$(8,391)$(8,221)$8,043 
The Company presents the earnings impact from forward points in the same line item that is used to present the earnings impact of the hedged item, i.e. cost of goods sold, for hedging forecasted inventory purchases and such amount is not material for all periods presented.
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Other Derivatives: Derivatives
The Company also enters into foreign currency exchange forward and swap contracts to reduce the short-term effects of currency exchange rate fluctuations on certain foreign currency receivables or payables.payables denominated in currencies other than the functional currencies of its subsidiaries. These forward and swap contracts generally mature within oneapproximately a month. The primary risk managed by using forward and swap contracts is the currency exchange rate risk. The gains or losses on foreign exchange forwardthese contracts are recognizednot material and included in other income (expense), net in the consolidated statements of operations based on the changes in fair value.
The notional amounts of foreignthese contracts outstanding as of March 31, 2023 and 2022 were $111.2 million and $226.5 million, respectively. Foreign currency exchange forward and swap contracts outstanding as of March 31, 2016 and 2015 relating to foreign currency receivables or payables were $63.7 million and $61.7 million, respectively. Open forward and swap contracts as of March 31, 2016 and 20152023 primarily consisted of contracts in Taiwanese Dollars, Australian Dollars, Mexican Pesos,Brazilian Real, Japanese Yen, and British PoundsMexican Peso to be settled at future dates at pre-determined exchange rates.
The fair value of all foreign currency exchange forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates. Cash flows from these contracts are classified as operating activities in the Consolidated Statementsconsolidated statements of Cash Flows.cash flows.
Note 11—Goodwill and Other Intangible Assets
AsThe Company conducts its impairment analysis of goodwill annually at December 31 2015or more frequently if changes in facts and March 31, 2015, allcircumstances indicate that it is more likely than not that the fair value of the Company's goodwill is related to the peripheralsCompany’s reporting unit.unit may be less than its carrying amount. The Company performedconducted its annual impairment analysis of the goodwill atas of December 31, 20152022 by performing a qualitative assessment and concluded that it was more likely than not that the fair value of its peripherals reporting unit exceeded its carrying amount. In assessing the qualitative factors, the Company considered the impact of these key factors: change in industry and competitive environment, growth inthe Company's market capitalization to $2.5 billion as of December 31, 2015 from $2.3 billion as of December 31, 2014, and budgeted-to-actual revenue performance for the twelve months ended December 31, 2015.2022. There have been no significanttriggering events or circumstancesidentified affecting the valuation of goodwill subsequent to the annual impairment test.
The following table summarizes the activityactivities in the Company's goodwill balance during fiscal years 2016 and 2015 (in thousands):
 Years Ended March 31, Years Ended March 31,
 2016 2015 20232022
Beginning of the period $218,213
 $219,415
Beginning of the period$448,175 $429,604 
Acquisitions —
 988
Acquisitions7,976 20,721 
Currency exchange rate impact and other 11
 (2,190)
Effects of foreign currency translationEffects of foreign currency translation(1,541)(2,150)
End of the period $218,224
 $218,213
End of the period$454,610 $448,175 
The Company's acquired other intangible assets are not materialwere as follows (in thousands):
 March 31,
 20232022
 Gross Carrying AmountAccumulated
Amortization		Net Carrying AmountGross Carrying AmountAccumulated
Amortization		Net Carrying Amount
Trademarks and trade names$36,790 $(26,774)$10,016 $36,790 $(22,295)$14,495 
Developed technology121,730 (94,792)26,938 119,407 (83,540)35,867 
Customer contracts/relationships71,110 (47,688)23,422 71,110 (40,971)30,139 
In-process R&D3,526 — 3,526 3,826 — 3,826 
Effects of foreign currency translation(1,021)292 (729)(634)86 (548)
Total$232,135 $(168,962)$63,173 $230,499 $(146,720)$83,779 
During fiscal year 2022, the Company recognized a pre-tax impairment charge of March 31, 2016 and 2015. There is no addition or disposition of acquired other$7.0 million to Jaybird-related intangible assets, during the years ended March 31, 2016primarily related to customer contracts and 2015.relationships, as a result of its decision to discontinue Jaybird-branded products.
For fiscal years 2016, 20152023, 2022 and 2014,2021, amortization expense for other intangible assets was $0.4$24.4 million $0.8, $30.2 million and $2.4$31.8 million, respectively. There was no futureThe Company expects that annual amortization expense related to the intangible asset asfor fiscal years
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Table of March 31, 2016.Contents

2024, 2025, 2026, 2027 and 2028 will be $20.3 million, $18.2 million, $11.9 million, $4.9 million and $3.3 million, respectively, and $1.0 million thereafter.
Note 12—Financing Arrangements
The Company had several uncommitted, unsecured bank lines of credit aggregating $45.7$181.3 million and $195.0 million as of March 31, 2016.2023 and 2022, respectively. There are no financial covenants under these lines of credit with which the Company must comply. As of March 31, 2016,2023 and 2022, the Company had outstanding bank guarantees of $19.7$13.6 million and $25.5 million, respectively, under these lines of credit. There was no borrowing outstanding under the linethese lines of creditcredit as of March 31, 2016 or March 31, 2015.2023 and 2022.
Note 13—Commitments and Contingencies
Operating Leases
The Company leases facilities under operating leases, certain of which require it to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at the Company's option and usually include escalation clauses linked to inflation. Future minimum annual rentals under non-cancelable operating leases at March 31, 2016 are as follows (in thousands):
Years Ending March 31,  
2017 $7,558
2018 5,411
2019 4,843
2020 4,433
2021 3,190
Thereafter 6,539
  $31,974
Rent expense for fiscal years 2016, 2015 and 2014 was $10.0 million, $9.6 million and $12.7 million, respectively.
In connection with its leased facilities, the Company recognized a liability for asset retirement obligations for 2016 and 2015 representing the present value of estimated remediation costs to be incurred at lease expiration. The liabilities for asset retirement obligations were not material as of March 31, 2016 and 2015.
Product Warranties
All of the Company's Peripherals products are covered by warranty to be free from defects in material and workmanship for periods ranging from one year to five years. For products launched prior to April 1, 2014, the standard warranty period was up to five years. Starting from April 1, 2014, the standard warranty for all new products launched was changed to two years from date of purchase for European Countries and generally one year from date of purchase for all other countries. At the time of sale, the Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation. The Company's estimate of costs to fulfill its warranty obligations is based on historical experience and expectations of future conditions. When the Company experiences changes in warranty claim activity or costs associated with fulfilling those claims, the warranty liability is adjusted accordingly.
Changes in the Company's warranty liabilityliabilities for fiscal years 20162023 and 20152022 were as follows (in thousands):
  Years Ended March 31,
  2016 2015
Beginning of the period $21,710
 $24,380
Provision 9,772
 10,958
Settlements (11,339) (12,027)
Currency translation 237
 (1,601)
End of the period $20,380
 $21,710
Investment Commitments
During 2015, the Company entered into a limited partnership agreement for a private investment fund specialized in early-stage start-up consumer hardware electronics companies and committed to a capital contribution of $4.0 million over the life of the fund. The Company has invested $0.9 million as of March 31, 2016, which is classified as other

assets on the consolidated balance sheet. As of March 31, 2016, $3.1 million capital contribution has not yet been called upon by the fund.
Other Contingencies
In April 2016, the Company entered into a settlement with the Securities and Exchange Commission (“SEC”) related to the accounting for Revue inventory valuation reserves that resulted in the restatement described in the Fiscal Year 2014 Annual Report on Form 10-K, revision to its consolidated financial statements concerning warranty accruals and amortization of intangible assets presented in its Amended Annual Report on Form 10-K/A, filed on August 7, 2013, and its transactions with a distributor for Fiscal Year 2007 through Fiscal Year 2009. The Company entered into the settlement without admitting or denying the findings of the SEC’s investigation and paid a civil penalty of $7.5 million. This amount was paid in April 2016. The Company made an accrual of the same amount in its consolidated financial statements as of March 31, 2016.
Guarantees
Logitech Europe S.A. guaranteed payments of two third-party contract manufacturers' purchase obligations. As of March 31, 2016, the maximum amount of this guarantee was $3.8 million, of which $1.0 million of guaranteed purchase obligations was outstanding.
 Years Ended March 31,
 20232022
Beginning of the period$46,219 $48,832 
Provision31,089 29,812 
Settlements(35,919)(32,082)
Effects of foreign currency translation(503)(343)
End of the period$40,886 $46,219 
Indemnifications
The Company indemnifies certain of its suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances includes indemnification for damages and expenses, including reasonable attorneys' fees. As of March 31, 2016,2023, no material amounts have been accrued for these indemnification provisions. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under its indemnification arrangements.
The Company also indemnifies its current and former directors and certain of its current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements because these exposures are not limited, the obligations are conditional in nature and the facts and circumstances involved in any situation that might arise are variable.
The Stock Purchase Agreement that the Company entered into in connection with the investment by three venture capital firms in Lifesize, Inc. contains representations, warranties and covenants of Logitech and Lifesize, Inc. to the Venture Investors. Subject to certain limitations, the Company has agreed to indemnify the Venture Investors and certain persons related to the Venture Investors for certain losses resulting from breaches of or inaccuracies in such representations, warranties and covenants as well as certain other obligations, including third party expenses, restructuring costs and pre-closing tax obligations of Lifesize.
Legal Proceedings
From time to time the Company is involved in claims and legal proceedings whichthat arise in the ordinary course of its business. The Company is currently subject to several such claims and a small number of legal proceedings. The Company believes that these matters lack merit and intends to vigorously defend against them. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial position,condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company's defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company's business, financial position,condition, cash flows or results of operations in a particular period. Any claims or proceedings against the Company, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. Any failure to obtain a necessary license or other rights, or litigation arising out of intellectual property claims, could adversely affect the Company's business.
Note 14—Shareholders' Equity
Share Capital
The Company's nominal share capital is CHF 43,276,655,43.3 million, consisting of 173,106,620 issued shares with a par value of CHF 0.25 each, all of which were issued and 10,697,117 of which13,763,347 were held in treasury shares as of March 31, 2016.2023.

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In September 2008, the Company's shareholders approved an amendment to reserveTable of Contents
The Company has reserved conditional capital of 25,000,000 shares for potential issuance on the exercise of rights granted under the Company's employee equity incentive plans. The shareholders also approved the creation ofplans and additional conditional capital for financing purposes, representing the issuance of up to 25,000,000 shares to cover any conversion rights under a future convertible bond issuance. This conditional capitalAt the 2020 Annual General Meeting, the shareholders of the Company authorized the Board of Directors to issue up to an additional 17,310,662 shares of the Company until September 9, 2022, which was created in orderauthorized at the 2022 Annual General Meeting to provide financing flexibility for future expansion, investments or acquisitions.be extended to September 14, 2024.
Dividends
Pursuant to Swiss corporate law, Logitech International S.A. may only pay dividends in Swiss Francs. Thethe payment of dividends is limited to certain amounts of unappropriated retained earnings (CHF 653.4 million(approximately CHF 1.2 billion, or $680.5USD equivalent of $1.3 billion as of March 31, 2023) and is subject to shareholder approval.
In May 2023, the Board of Directors recommended that the Company pay cash dividends for fiscal year 2023 of CHF 1.06 per share (USD equivalent of approximately $1.16 per share, which would result in a gross aggregate dividend of approximately $184.2 million, based on the exchange rate atand shares outstanding, net of treasury shares, on March 31, 2016) and is subject to shareholder approval. 2023).
In March 2015,September 2022, the Company announced a plan to pay $250.0paid gross cash dividends of CHF 0.96 (USD equivalent of $0.98) per common share, totaling $158.7 million in cumulative dividends for fiscal year 2015 through fiscal year 2017.on the Company's outstanding common shares. In September 2015,2021, the Company declared and paid cash dividends of CHF 0.510.87 (USD equivalent of $0.53)$0.95) per common share, totaling approximately $85.9$159.4 million on the Company’s outstanding common stock.shares. In December 2014, Logitech's shareholders approved aSeptember 2020, the Company paid cash dividend paymentdividends of CHF 43.10.79 (USD equivalent of $0.87) per common share, totaling $146.7 million outon the Company's outstanding common shares.
Any future dividends will be subject to the approval of retained earnings to Logitechthe Company's shareholders. Eligible shareholders were paid CHF 0.26 per share ($0.27 per share in U.S. Dollars), totaling $43.8 million in U.S. Dollars in December 2014. In September 2013, Logitech's shareholders approved a cash dividend payment of CHF 33.7 million out of retained earnings to Logitech's shareholders. Eligible shareholders were paid CHF 0.21 per share ($0.22 per share in U.S. Dollars), totaling $36.1 million in U.S. Dollars in September 2013.
Legal Reserves
Under Swiss corporate law, a minimum of 5% of the Company's annual net income must be retained in a legal reserve until this legal reserve equals 20% of the Company's issued and outstanding aggregate par value per share capital. These legal reserves represent an appropriation of retained earnings that are not available for distribution and totaled $10.0$10.4 million at March 31, 20162023 (based on the exchange rate at March 31, 2016)2023).
Share Repurchases
In March 2014,May 2020, the Company's Board of Directors approved the 20142020 share buybackrepurchase program, which authorizesauthorized the Company to use up to $250.0 million to purchase its ownup to 17.3 million of Logitech shares. The Company's share buyback program is expected to remain in effect for a period of three years. Shares may be repurchased from time to time on the open market, through block trades or otherwise. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.factors.

In April 2021, the Company's Board of Directors approved an increase of $750.0 million of the 2020 share repurchase program, to an aggregate amount of $1.0 billion. The Swiss Takeover Board approved this increase and it became effective on May 21, 2021.

In July 2022, the Company’s Board of Directors approved an increase of $500 million to the 2020 share repurchase program, to an aggregate amount of up to $1.5 billion to purchase up to 17.3 million of Logitech shares. The Swiss Takeover Board approved this increase and it became effective on August 19, 2022. The 2020 share repurchase program is expected to remain in effect for a period of three years through July 27, 2023. As of March 31, 2023, $505.8 million was available for repurchase under the 2020 repurchase program.

A summary of the approved and active share buybackrepurchase program in fiscal year 2023 is shown in the following table (in thousands, excluding transaction costs):
 ApprovedRepurchased
Share Repurchase Program
Shares (1)
AmountsSharesAmounts
May 202017,311 $1,500,000 14,014 $994,156 
(1) The approval of the share repurchase program by the Swiss Takeover Board limits the number of shares that the Company may repurchase to no more than 10% of its authorized share capital and voting rights.
Logitech International S.A. | Fiscal 2023 Form 10-K | 94
  Approved Repurchased
Share Buyback Program Shares Amounts Shares Amounts
March 2014 17,311
 $250,000
 5,066
 $71,702

During fiscal years 2016 and 2015, 5.0 million and 0.1 million shares were repurchased for $70.4 million and $1.7 million, respectively. There were no share repurchases during fiscal year 2014.Table of Contents

Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss were as follows (in thousands):
 
 Currency Translation
Adjustment		Defined
Benefit
Plans		Deferred
Hedging
Gains (Losses)		Total
March 31, 2022$(102,461)$(3,495)$1,833 $(104,123)
Other comprehensive income (loss)1,592 8,020 (5,766)3,846 
March 31, 2023$(100,869)$4,525 $(3,933)$(100,277)
  Accumulated Other Comprehensive Income (Loss)
  
Cumulative
Translation
Adjustment (1)
 
Defined
Benefit
Plans(1)
 
Deferred
Hedging
Gains (Losses)
 Total
March 31, 2015 $(90,224) $(26,964) $3,951
 $(113,237)
Other comprehensive income (loss) 6,186
 793
 (5,727) 1,252
March 31, 2016 $(84,038) $(26,171) $(1,776) $(111,985)

(1) Tax effect was not significant as of March 31, 2016 or 2015.
Note 15—Segment Information
As discussedThe Company operates in "Note 2 — Summarya single operating segment that encompasses the design, manufacturing and marketing of Significant Accounting Policies", the Company's Peripherals segment remains as the sole reporting segment reported in continuing operations.

The Company's Peripherals segment continues to design, manufacture and markets products that allow people to connect through music,peripherals for PCs, tablets, gaming, video computing,conferencing, and other digital platforms. Operating performance measures for Peripherals reportsare provided directly to the Company's Chief Executive Officer (“CEO”),CEO, who is considered to be the Company’s Chief Operating Decision Maker (“CODM”).Maker. The CEO periodically reviews information such as net sales and adjusted operating income (loss) to make business decisions. These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense, amortization and amortizationimpairment of intangible assets.assets, acquisition-related costs and change in fair value of contingent consideration from business acquisitions.
Net salesSales by product categories and sales channels, excluding intercompany transactions, were as follows (in thousands):
  Years Ended March 31,
  2016 2015 2014
Mobile Speakers 229,718
 178,038
 87,414
Audio-PC & Wearables 196,013
 213,496
 250,037
Gaming 245,101
 211,911
 186,926
Video Collaboration 89,322
 62,215
 29,058
Home Control 59,075
 68,060
 67,371
Pointing Devices 492,543
 487,210
 506,884
Keyboards & Combos 430,190
 426,117
 415,314
Tablet & Other Accessories 103,886
 140,994
 172,484
PC Webcams 98,641
 96,680
 113,791
Other (1)
 2,570
 2,725
 37,000
Total net retail sales 1,947,059
 1,887,446
 1,866,279
OEM 71,041
 117,462
 141,749
Total net sales $2,018,100
 $2,004,908
 $2,008,028

 Years Ended March 31,
 202320222021
Pointing Devices$728,357 $781,108 $680,907 
Keyboards & Combos836,432 967,301 784,488 
PC Webcams227,692 403,651 439,865 
Tablet & Other Accessories254,374 310,123 384,301 
Gaming (1)
1,211,485 1,451,883 1,239,005 
Video Collaboration887,517 997,164 1,044,935 
Mobile Speakers111,649 149,782 174,895 
Audio & Wearables274,231 401,424 468,776 
Other (2)
7,081 18,665 35,107 
Total Sales$4,538,818 $5,481,101 $5,252,279 

(1) Gaming includes streaming services revenue generated by Streamlabs.
(1)Other category includes products that the Company currently intends to transition out of, or have already transitioned out of, because they are no longer strategic to the Company's business.
Net sales to unaffiliated customers(2) Other includes Smart Home.
Sales by geographic region for fiscal years 2016, 2015 and 2014 (based on the customers' location)locations) for fiscal years 2023, 2022 and 2021 were as follows (in thousands):

 Years Ended March 31,
 202320222021
Americas$1,930,908 $2,317,941 $2,206,552 
EMEA1,299,657 1,724,027 1,735,682 
Asia Pacific1,308,253 1,439,133 1,310,045 
Total Sales$4,538,818 $5,481,101 $5,252,279 
  Years Ended March 31,
  2016 2015 2014
Americas $881,379
 $864,761
 $799,431
EMEA 645,694
 670,890
 724,671
Asia Pacific 491,027
 469,257
 483,926
  $2,018,100
 $2,004,908
 $2,008,028
TheRevenues from sales to customers in the United States represented 38%35%, 36%34% and 34%35% of net sales for thein fiscal years 2016, 20152023, 2022 and 2014,2021, respectively. Revenues from sales to customers in Germany represented 14%, 15% and 16% of sales in fiscal years 2023, 2022 and 2021, respectively. Revenues from sales to customers in China represented 11% and 10% of sales in fiscal years 2023 and 2022, respectively. No other single country represented more
Logitech International S.A. | Fiscal 2023 Form 10-K | 95

Table of Contents
than 10% of net sales during these periods.periods presented herein. Revenues from net sales to customers in Switzerland, the Company's homecountry of domicile, represented 2% 3% of net sales forin each of fiscal years 2016, 20152023, 2022 and 2014.2021.
Geographic long-livedProperty, plant and equipment, net (excluding software) and right-of-use assets information, primarily fixed assets, are reported below based on the location of the assetby geographic region were as follows (in thousands):
 March 31,
 20232022
Americas$59,183 $22,578 
EMEA38,890 23,830 
Asia Pacific69,939 87,265 
Total$168,012 $133,673 
  March 31,
  2016 2015
     
Americas $40,221
 $44,263
EMEA 3,194
 3,473
Asia Pacific 49,445
 38,742
  $92,860
 $86,478
Long-livedProperty, plant and equipment, net (excluding software) and right-of-use assets in the United States, China, and Ireland were $58.7 million, $48.8 million, and $17.7 million, respectively, as of March 31, 2023. Property, plant and equipment, net (excluding software) and right-of-use assets in the United States and China were $40.0$21.7 million and $44.5$66.8 million, atrespectively, as of March 31, 2016, respectively,2022. Property, plant and $44.3equipment, net (excluding software) and right-of-use assets in Switzerland, the Company's country of domicile, were $13.7 million and $33.4$13.6 million at as of March 31, 2015, 2023 and 2022, respectively. No other countries represented more than 10% of the Company's total consolidated long-livedproperty, plant and equipment, net (excluding software) and right-of-use assets atas of March 31, 20162023 or 2015. Long-lived assets in Switzerland, the Company's home domicile, were $1.7 million and $1.5 million at March 31, 2016 and 2015, respectively.2022.

Note 16—Restructuring
During the first quarter of fiscal year 2016, the Company implemented a restructuring plan to exit the OEM business, reorganize Lifesize to sharpen its focus on its cloud-based offering, and streamline the Company's overall cost structure, overhead and infrastructure cost reductions with a targeted resource realignment. Restructuring charges incurred during the year ended March 31, 2016 under this plan primarily consisted of severance and other ongoing and one-time termination benefits. Charges and other costs related to the workforce reduction and structure realignment are presented as restructuring charges in the Consolidated Statements of Operations. On a total company basis, including the Lifesize video conferencing business as reported in discontinued operations, the Company has incurred $25.5 million under this restructuring plan, including $24.4 million for cash severance and other personnel costs. The Company substantially completed this restructuring plan by the fourth quarter of fiscal year 2016.
During the fourth quarter of fiscal year 2013, the Company implemented a restructuring plan to align its organization to its strategic priorities of increasing focus on mobility products, improving profitability in PC-related products and enhancing global operational efficiencies. As part of this restructuring plan, the Company reduced its worldwide non-direct labor workforce. Restructuring charges under this plan primarily consisted of severance and other one-time termination benefits. During fiscal year 2015, the Company recorded a $4.9 million restructuring credit, on a total company basis, primarily as a result of partial termination of its lease agreement for the Silicon Valley campus, which was previously vacated and under the restructuring plan during fiscal year 2014. The Company substantially completed this restructuring plan by the fourth quarter of fiscal year 2014.

The following table summarizes restructuring relatedrestructuring-related activities during fiscal year 2016years 2023 and 2015 from continuing operations2022 (in thousands):
 Termination
Benefits		Contract Termination and OtherTotal
Accrued restructuring liability at March 31, 2021 (1)
$627 $— $627 
Charges, net879 1,286 2,165 
Cash payments(945)(390)(1,335)
Accrued restructuring liability at March 31, 2022 (1)
$561 $896 $1,457 
Charges, net27,631 6,942 34,573 
Cash payments(14,015)(2,481)(16,496)
Accrued restructuring liability at March 31, 2023 (1)
$14,177 $5,357 $19,534 
  Restructuring - Continuing Operations 
  
Termination
Benefits
 
Lease Exit
Costs
 Other Total 
Accrual balance at March 31, 2014 $—
 $7,309
 $—
 $7,309
 
Credits, net —
 (4,777) —
 (4,777) 
Cash payments —
 (1,578) —
 (1,578) 
Accrual balance at March 31, 2015 —
 954
 —
 954
 
Charges, net 17,280
 337
 185
 17,802
 
Cash payments (11,373) (1,166) (185) (12,724) 
Accrual balance at March 31, 2016 $5,907
 $125
 $—
 $6,032
*
*This balance is(1) The accrual balances are included in accrued and other current liabilities on the Company’s consolidated balance sheets.


During the second quarter of fiscal year 2023, the Company initiated a restructuring plan to realign its business group and engineering structure with its go-to-market strategy to more effectively compete within the enterprise market and to better serve end-users. During the fourth quarter of fiscal year 2023, the Company undertook further actions to remove organization layers as well as streamline its marketing organization to increase efficiency. These actions resulted in charges related to employee severance and other termination benefits as well as contract termination and other costs. The following tables summarizeCompany recorded pre-tax charges totaling $34.6 million in restructuring charges, net in the consolidated statement of operations for the year ended March 31, 2023. The Company expects to substantially complete these restructuring activities within the next twelve months.

During the third quarter of fiscal year 2022, as part of the Company's strategic review, the Company decided to cease future product launches under the Jaybird brand within the Audio & Wearables product category. As a result, the Company recorded $7.6 million in cost of goods sold related activitiesto write-offs for excess inventories, $7.0 million impairment to the intangible assets acquired as part of the Jaybird acquisition (see Note 11), and $2.2 million in restructuring charges, net, related to production cancellation costs and employee severance and other termination benefits, for the year ended March 31, 2022. This restructuring plan has been substantially completed during fiscal year 2016and 2015 from discontinued operations (in thousands):

2023.
Logitech International S.A. | Fiscal 2023 Form 10-K | 96
  Restructuring - Discontinued Operations 
  Termination
Benefits		 Lease Exit
Costs		 Other Total 
Accrual balance at March 31, 2014 $142
 $110
 $—
 $252
 
Charges (86) (25) —
 (111) 
Cash payments (56) —
 —
 (56) 
Accrual balance at March 31, 2015 —
 85
 —
 85
 
Charges, net 7,095
 —
 805
 7,900
 
Cash payments (6,460) (14) (805) (7,279) 
Adjustment as a result of disposition of discontinued operations (267) (71) —
 (338) 
Accrual balance at March 31, 2016 $368
 $—
 $—
 $368
*


Table of Contents
*This balanceNote 17 — Leases

The Company is includeda lessee in accruedvarious noncancellable operating leases, primarily real estate facilities for office space. As of March 31, 2023, the Company's lease arrangements are comprised of operating leases with various expiration dates through November 30, 2033. The lease term for all of the Company’s leases includes the noncancellable period of the lease. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and other current liabilities in continuing operationstherefore are not factored into the Company's determination of the duration of the lease arrangement. The Company's leases do not contain any material residual value guarantees.

The total operating lease costs including short-term lease costs were $21.2 million, $17.3 million and $15.0 million as of March 31, 2016,2023, 2022, and 2021, respectively. Total variable lease costs were not material during the year ended March 31, 2023, 2022 and 2021. The total operating and variable lease costs were included in cost of goods sold, marketing and selling, research and development, and general and administrative in the Company's consolidated statements of operations.

Supplemental cash flow information related to operating leases (in thousands):
Years Ended March 31,
202320222021
Cash paid for amounts included in the measurement of operating lease liabilities$16,565 $15,400 $13,865 
ROU assets obtained in the exchange for operating lease liabilities$43,093 $22,174 $15,659 

Future lease payments included in the measurement of operating lease liabilities as it's expected to be paid byof March 31, 2023 for the continuing operations pursuant tofollowing five fiscal years and thereafter are as follows (in thousands):

Years Ending March 31,
2024$13,409 
202513,657 
202610,769 
202710,155 
20289,107 
Thereafter40,889 
Total lease payments$97,986 
Less: imputed interest(15,416)
Less: tenant improvement allowance (1)
(11,554)
Present value of lease liabilities$71,016 

(1) The operating leases for two real estate facilities in the transaction occurred on December 28, 2015 (See Note 3).
Note 17—Subsequent Events
On April 20, 2016,Americas region provide for tenant improvement allowances, for which the lessors reimburse the Company acquired Jaybird LLCfor the costs of Salt Lake City, Utah, for approximately $50 million in cash, with an additional earn-out ofconstructing leasehold improvements up to $45 million based on achievement$11.6 million.

Weighted-average lease terms and discount rates were as follows:
Years Ended March 31,
20232022
Weighted-average remaining lease terms (in years)8.14.6
Weighted-average discount rate3.7 %2.8 %


Logitech International S.A. | Fiscal 2023 Form 10-K | 97

Table of growth targets over the next two years. The Company is still in the process of preparing the initial accounting of the transaction and expects to establish a preliminary purchase price allocation with respect to this transaction by the end of the first quarter of fiscal year 2017.Contents


LOGITECH INTERNATIONAL S.A.
SUPPLEMENTARY DATA
QUARTERLY FINANCIAL DATA
(unaudited)
The following table contains selected unaudited quarterly financial data for fiscal years 2016 and 2015 (in thousands, except per share amounts):
 Year ended March 31, 2016 (3) Year ended March 31, 2015 (3)
 Q1 (2) Q2 (2) Q3 (2) Q4 (2) Q1 Q2 Q3 Q4 (1)
Net sales$447,686
 $518,494
 $621,079
 $430,841
 $456,446
 $501,857
 $604,322
 $442,283
Cost of goods sold289,753
 345,977
 412,582
 288,741
 291,641
 315,486
 391,715
 300,609
Gross profit157,933
 172,517
 208,497
 142,100
 164,805
 186,371
 212,607
 141,674
Operating expenses: 
  
  
  
  
  
  
  
Marketing and selling75,796
 78,833
 87,295
 77,091
 77,178
 81,439
 87,486
 75,646
Research and development28,170
 28,893
 29,273
 27,288
 25,737
 26,875
 27,397
 28,297
General and administrative28,812
 25,074
 24,080
 23,582
 35,251
 33,339
 28,172
 29,233
Restructuring charges (credits), net11,538
 3,146
 (666) 3,784
 (35) —
 —
 (4,742)
Total operating expenses144,316
 135,946
 139,982
 131,745
 138,131
 141,653
 143,055
 128,434
Operating income13,617
 36,571
 68,515
 10,355
 26,674
 44,718
 69,552
 13,240
Interest income, net255
 189
 105
 241
 251
 349
 224
 373
Other income (expense), net(1,019) (737) 862
 2,518
 (171) (843) (2,688) 1,404
Income from continuing operations before income taxes
12,853
 36,023
 69,482
 13,114
 26,754
 44,224
 67,088
 15,017
Provision for (benefit from) income taxes(7) 5,571
 1,442
 (3,896) 2,769
 5,016
 670
 (3,801)
Net Income from continuing operations12,860
 30,452
 68,040
 17,010
 23,985
 39,208
 66,418
 18,818
Income (loss) from discontinued operations, net of income taxes
(5,423) (12,355) (2,954) 11,687
 (4,310) (3,117) (3,634) (128,085)
Net income (loss)$7,437
 $18,097
 $65,086
 $28,697
 $19,675
 $36,091
 $62,784
 $(109,267)
                
Net income (loss) per share - Basic: 
  
  
  
  
  
  
  
Continuing operations$0.08
 $0.19
 $0.42
 $0.10
 $0.15
 $0.24
 $0.41
 $0.11
Discontinued operations$(0.03) $(0.08) $(0.02) $0.08
 $(0.03) $(0.02) $(0.03) $(0.77)
Net income (loss) per share - basic$0.05
 $0.11
 $0.40
 $0.18
 $0.12
 $0.22
 $0.38
 $(0.66)
                
Net income (loss) per share - Diluted:               
Continuing operations$0.08
 $0.18
 $0.41
 $0.10
 $0.14
 $0.24
 $0.40
 $0.11
Discontinued operations$(0.04) $(0.07) $(0.02) $0.07
 $(0.02) $(0.02) $(0.02) $(0.77)
Net income (loss) per share - diluted$0.04
 $0.11
 $0.39
 $0.17
 $0.12
 $0.22
 $0.38
 $(0.66)
                
Shares used to compute net income (loss) per share: 
  
  
  
  
  
  
  
Basic164,431
 163,515
 162,669
 162,671
 163,012
 163,230
 163,533
 164,319
Diluted166,895
 165,841
 165,168
 165,365
 165,833
 166,065
 166,321
 166,424





(1)The Company recognized $4.7 million restructuring credits as result of partial termination of its lease agreement for Silicon Valley campus, which was previously vacated and under a restructuring plan during fiscal 2014.

(2)During Fiscal year 2016, the Company incurred restructuring charges of $17.8 million related to the restructuring plan implemented in fiscal 2016. The $4.8 million in restructuring credits during fiscal year 2015 were related to restructuring plans the Company implemented in fiscal year 2014.

(3)On December 28, 2015, the Company divested its Lifesize video conferencing business and, as a result, the Company reflected the Lifesize video conferencing business as discontinued operations in the consolidated statements of operations and, as such, the results of that business have been excluded from all line items other than “Loss from discontinued operations, net of income taxes” for all periods presented.





Schedule II
LOGITECH INTERNATIONAL S.A.
VALUATION AND QUALIFYING ACCOUNTS
For the Fiscal Years Ended March 31, 2016, 20152023, 2022 and 20142021 (in thousands)
The Company's Schedule II includes valuation and qualifying accounts related to allowances for doubtful accounts, sales returns, cooperative marketing arrangements, customer incentive programs, and pricing programs, for direct customers and tax valuation allowances. The Company also has sales incentive programs for indirect customers with whom it does not have a direct sales and receivable relationship. These programs are recorded as accrued liabilities and are not considered valuation or qualifying accounts.
Balance at
Beginning of
Year
Charged
(Credited) to
Statement of
Operations (1)
Claims and
Adjustments
Applied Against
Allowances (1)
Balance at
End of
Year
Allowance for doubtful accounts:    
2023$2,212 $(2,019)$(107)$86 
2022$1,161 $1,691 $(640)$2,212 
2021$1,894 $(533)$(200)$1,161 
Allowance for sales returns:    
2023$12,321 $157,619 $(159,794)$10,146 
2022$14,438 $162,381 $(164,498)$12,321 
2021$6,599 $122,803 $(114,964)$14,438 
Allowance for cooperative marketing arrangements:    
2023$56,372 $262,363 $(278,240)$40,495 
2022$43,276 $286,116 $(273,020)$56,372 
2021$38,794 $222,732 $(218,250)$43,276 
Allowance for customer incentive programs:    
2023$97,460 $329,666 $(355,481)$71,645 
2022$76,200 $348,072 $(326,812)$97,460 
2021$55,741 $256,755 $(236,296)$76,200 
Allowance for pricing programs:    
2023$120,797 $784,835 $(806,810)$98,822 
2022$120,568 $885,228 $(884,999)$120,797 
2021$100,168 $782,734 $(762,334)$120,568 
Tax valuation allowance:    
2023$29,858 $908 $— $30,766 
2022$28,926 $887 $45 $29,858 
2021$29,171 $(245)$— $28,926 
  
Balance at
Beginning of
Year
 
Charged
(Credited) to
Statement of
Operations
 
Claims and
Adjustments
Applied Against
Allowances
 
Balance at
End of
Year
Allowance for doubtful accounts:  
  
  
  
2016 $707
 $71
 $(111) $667
2015 $1,297
 $(334) $(256) $707
2014 $1,724
 $670
 $(1,097) $1,297
Allowance for sales returns:  
  
  
  
2016 $17,236
 $66,935
 $(65,645) $18,526
2015 $18,503
 $66,785
 $(68,052) $17,236
2014 $20,284
 $60,113
 $(61,894) $18,503
Allowances for cooperative marketing arrangements:  
  
  
  
2016 $24,919
 $131,410
 $(128,172) $28,157
2015 $23,255
 $113,610
 $(111,946) $24,919
2014 $23,186
 $100,005
 $(99,936) $23,255
Allowances for customer incentive programs:  
  
  
  
2016 $47,364
 $164,307
 $(150,799) $60,872
2015 $40,205
 $142,413
 $(135,254) $47,364
2014 $41,554
 $104,719
 $(106,068) $40,205
Allowances for pricing programs:  
  
  
  
2016 $70,951
 $260,698
 $(250,096) $81,553
2015 $68,798
 $246,780
 $(244,627) $70,951
2014 $54,931
 $217,967
 $(204,100) $68,798
Tax valuation allowances:  
  
  
  
2016 $5,590
 $1,255
 $(1,507) $5,338
2015 $4,872
 $995
 $(277) $5,590
2014 $6,014
 $515
 $(1,657) $4,872


(1) The amounts for fiscal years 2023, 2022 and 2021 include immaterial impacts from the business acquisitions during the year.



Logitech International S.A. | Fiscal 20162023 Form 10-K | 11698